A Vision for the Evolution of Economic Inclusion in the Supply Chain

November 3, 2021

Meet Andrea Sordi, clinical assistant professor at the University of Tennessee’s Haslam College of Business, home of the Global Supply Chain Institute. Professor Sordi has more than 20 years of hands-on, professional experience observing supply chain trends in the consumer goods industry. Before joining the faculty at UT, Sordi was head of global procurement strategy and head of global indirect services sourcing for Mondelez Global LLC. Sordi sat down with us to discuss his vision for the future of economic inclusion as it applies to international supply chain patterns.

What is “economic inclusion” and why is it so valuable?

“Economic inclusion” is the creation of sustainable value through a diverse supply chain ecosystem. It’s crucial that the world’s supply chain is not targeting single or similar suppliers but rather opened up to include suppliers from a variety of social groups. If this is the case, then it quickly becomes a positive, self-supporting cycle. If you create more equality in the economy, you develop more diverse supply chains that can sustain more diverse employers, which sees the wealth of diverse groups increase. With their increase in buying power, these groups can buy more as consumers, giving birth to a new, healthier supply cycle.

Global companies are finally waking up to the idea that diversity, equity and inclusion initiatives need to go beyond corporate social responsibility and enter into procurement. What are some changes or trends that organizations must watch closely?

The US population is growing steadily, but it’s growing within different dynamic groups. The number of white Americans is actually down, while other ethnic groups are growing faster than ever. By 2045, groups we call ‘minorities’ today are going to represent an almost equal portion of the population. This trend is happening all over the globe. If an organization wants to keep its competitive advantage by targeting new consumer groups, it must be acutely aware of demographic changes. Adding new consumers to a marketplace broadens the groups that have power and influence. There are statistics that prove that if you feel you belong to a certain class or society, you tend to exhibit specific buying patterns. As such, global organizations must be aware of these patterns if they want to embrace new consumer groups and meet their needs.

Minority-owned businesses account for more than 50% of the two-milion new businesses launched in the US over the last ten years. How is UT’s Global Supply Chain Institute  advising its students and partners to capture that value generated by these companies?

The first thing is influencing new generation supply chain leaders to consider the power of economic inclusion as a competitive advantage, and not just a compliance check box. We are looking to develop non-degree programs to support minority businesses to face the challenges they may encounter when dealing with big corporations. We’re launching a Social and Environmentally Sustainable Supply Chain Management class in our supply chain programs for undergraduates.

“At UT, we want the supply chain leaders of the future to understand the value of social supply, sustainability, and economic inclusion. We also want to help them develop soft skills, like collaboration and active listening, competencies that are needed to work with businesses of all sizes, large and small.”

This class will not only be focused on environmental topics, but also on social aspects, as well. At UT, we want the supply chain leaders of the future to understand the value of social supply, sustainability, and economic inclusion. We also want to help them develop soft skills, like collaboration and active listening, competencies that are needed to work with businesses of all sizes, large and small.

From what you’ve uncovered in your research, what would you say some of the biggest takeaways are for supply chain managers over the next 10 years?

At the risk of using buzzwords, future supply chains need to become more resilient and agile. That doesn’t mean going through the next pandemic without any shortages or interruptions; it means understanding risk and better anticipating potential scenarios to ensure that the impact to global supply chains is minimized. Consumer trends change every day. It’s another reason why diversity in the supplier base is critical. Studies show that diverse businesses are 20% more creative, which means they can bring more innovation. They also tend to be leaner, more flexible, and better at mitigating risks, illustrating why the pursuit of economic inclusion can provide countless institutional benefits.

What are some ways that companies can successfully introduce an economic inclusion mindset into their supply chain management teams?

Personally, I look at supply chain like a team sport where you can’t win alone. To be successful, you need the right combination of players with different skills. You also need the right culture, and that comes from the top down. For a supply chain organization, this means executives that impart the right culture of diversity and inclusion so that it becomes part of the company DNA.

This requires a clear governance structure, especially if you want to expand globally. Diversity means different things in different countries, so the ability to understand and manage programs across the globe is crucial.

What industries can benefit most from applying this type of model to their domestic and global supply chains?

The benefits can be felt in every industry. I’ve seen service industries that have the best-in-class social sustainability programs that have really embedded that mindset. One example is Accenture: their CEO believes in inclusion, and everyone at the organization follows that lead. Their dedication to a responsible sourcing process is paramount to the way they think. They’re an organization that is diverse in their employment base: their workforce is diverse, their consumers are diverse and their suppliers need to be diverse. Another great example from a different industry is the food company, McCormick. They operate in very remote parts of the world, and they’re expanding their social reach and making social improvements in every aspect of their business.

What have you learned when designing this model that surprised you?

Many organizations are doing a lot of the right things, more than what they realize. However, many lack the right culture that can help make people understand the value of what is being done. These companies tend to engage in efforts transactionally because they want to belong to some kind of a group that does ‘X billions of dollars’ of diverse business, which is great, and can be a trigger to do the ‘right’ things. However, many organizations like this still miss the link and underlying knowledge that come with genuinely embracing economic inclusion.

If you could give one piece of advice to a chief supply chain officer looking to leverage the substantial business opportunities for economic inclusion, what would it be?

Make sure your organization makes diversity efforts that go beyond simply checking a box. Economic inclusion is more than just ‘it’s right to do this.’ It creates a positive cycle of equalities that generates value for society. Craft your company culture as a breeding ground for economic inclusion. Culture is so pivotal in making a success of that kind of mindset. Supply chain executives must play a key role. If they can demonstrate a natural affinity and passion for inclusion, that can resonate throughout their entire organization.

The Next Evolution of Your Supply Chain Career is at UT Haslam

Andrea Sordi’s industry-leading work on the evolution of economic inclusion is one of many areas of focus at the Haslam College of Business at the University of Tennessee, Knoxville. Driving value and societal impact through economic inclusion is one of the ways the Global Supply Chain Institute educates the next generation of supply chain leaders. Learn more about partnering with the GSCI to grow your supply chain talent.