When it comes to recovering from the recession, financial analysts, consumers and corporations are looking toward small businesses to help boost the economy. IBM has come up with a novel idea named Supplier Connection to reach out to major corporations, such as AT&T, Bank of America, CitiGroup, Pfizer, UPS, Advanced Micro Devices (AMD), Caterpillar, and Dell to reinvent its supply chain by working with small businesses to move product. The members of Supplier Connection purchase more than $150 billion in goods and services each year through their global supply chains.
Small businesses accounted for two-thirds of net-new jobs created in the U.S. between 1993 and 2008, according to the Small Business Administration, so it’s no wonder that so many industries are focusing efforts on boosting small business networks to improve the economy overall. At the same time, small business owners are the first ones hit when it comes to sales and have troubles when looking to expand employee base, geographic reach, and clientele.
We sat down with Linda Cantwell, Vice President of Integrated Supply Chain Global Procurement Shared Services Division and lead in charge of Supplier Connection, a consortium of large corporations that works with small businesses to improve national supply chains.
A BREAKDOWN OF SUPPLIER CONNECTION
Supplier Connection was the brainchild launched by IBM’s Corporate Citizenship group. The free, web-based portal allows small businesses to register to become a potential supplier to large companies. At the same time, the portal allows large companies to reach out to small businesses in which they’d like to do business.
“Our corporate citizenship projects work to make improvements in the world that go beyond day-to-day nature of conducting our business and really make a difference with some of the world’s biggest problems,” Cantwell says. “Our leader in corporate citizenship, Stan Litow, realized that big companies really had the opportunity to help small program.”
IBM approached its first partner, Bank of America, in July 2010 regarding Supplier Connection before announcing the project to the rest of the external community in September. “Once we realized the project would be successful, we realized the urgency of it because of the then and current economic climate,” she says. The first release of the Supplier Connection portal was released in February 2011.
LARGE CORPORATION AND SMALL BUSINESS CRITERIA
In order to register for Supplier Connection, a U.S.-based small business must either have revenue of $50 million or less, or have less than 500 employees. To date, Supplier Connection has over 500 small business suppliers who have registered on the site and are visible to the buyer community, according to John Dischinger, Program Director for Supplier Connection.
“We’re focused on bringing in large, U.S.-based enterprises that have an active procurement community. These corporations should also have the potential to engage smaller brands to add to their supplier network,” Cantwell continues. “They should also have the wherewithal to channel their purchases to that businesses.”
Dischinger says Supplier Connection has gotten great traction since the soft announcement of the initiative and he hopes it will drive and promote job growth beyond the recession. He hopes small businesses working with the initiative will be able to hire more employees, take out loans, and help spur the U.S. economy.
IBM was able to look at the company as a whole and recognize the nature of its work. While larger companies become more sophisticated when it comes to its sourcing strategies, small businesses can sometimes get crowded out of deals. IBM’s Supplier Connection hopes to allow for opportunities for both sides of the supplier spectrum while also allowing for economic growth.
For more information, visit https://www.supplier-connection.net.