IBM has joined with six other partners to form Supply Connect, an initiative to promote the use of local small businesses by large procurement organizations. Chet Karwatowski, senior technical staff member with IBM, calls the program "unique." It draws on the supply chains of large corporations in an effort to spur job growth in the U.S. The idea is to channel a portion of supply-chain spend to local small businesses.
IBM started the initiative with the help of AT&T, Caterpillar, Bank of America, Citigroup, Pfizer and UPS. Supplier Connection was announced in September of 2010; since that time the partners have worked aggressively to create a portal for small businesses to register and join a thriving buying community. The system went live in February of 2011. As of August of 2011, just under 200 small businesses had joined, according to John Dischinger, program director for Supplier Connection.
The new initiative differs from past efforts in its focus on small business based in the U.S., Karwatowski says. It requires that members know much more about their suppliers than might be the case with a mere listing service. Each business fills out a comprehensive application - "like a college admission," Karwatowksi says - and that form becomes available to all members.
As part of the registration process, small companies learn what it takes to be a supplier to a large business. They go through nine sections, covering areas such as security and electronic business. Sponsoring companies also provide assets to help applicants improve their position.
For purposes of the initiative, a small business is defined as one with either 500 employees or less than $50m in revenue. That description covers some nine million U.S. companies, Karwatowski notes. Beyond that, Supplier Connection is targeting 13 commodity areas that are key to its sponsoring membership.
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