Supplier Diversity Expert Ralph Moore Says Strategic Alliances are a Must for Minority Businesses

Ralph G. Moore is president of RGMA, Inc., a Chicago-based professional services firm specializing in the design and implementation of supplier diversity programs.

Ralph Moore is a man who likes to put things into perspective, especially when it comes to supplier diversity.  He is founder and president of a consulting firm that bears his name and has specialized in designing and implementing supplier diversity programs for major corporations and government agencies for nearly a quarter century.  He credits the late Perham Mitchim for passage of a Congressional bill that allows government contracts to specify the utilization of minority suppliers.  Without that piece of legislation, Moore doubts that many corporations would be engaged in supplier diversity today.

As Moore looks back over the evolution of supplier diversity within the business mainstream, he positions early efforts as attempts by corporations to be good corporate citizenship.  He says many companies implemented supplier diversity programs because it was the right thing to do.  Moore believes that current economic conditions have pushed the value proposition beyond doing the right thing. "Today, it has to be the smart thing to do." In today's tough economic climate, "the right thing to do" is often the first thing to get cut," says Moore.

From Moore's perspective, supplier diversity is an asset, not a liability.  He claims that advanced supplier diversity program are a real value proposition for the organizations that maintain them. 

Ralph Moore recognizes that CEOs, senior management and stockholders often demand aggressive, if not immediate, solutions to uncertain market conditions.  Sometimes those solutions adversely affect minority businesses. 

"There is tremendous emphasis on profits, cost reduction, supplier base reduction -- a variety of things that are changing the way corporations do business," acknowledges Moore. "Corporate consolidations have forced consolidations throughout the supply chain, and that has forced many minority firms into subcontractor positions."  

In many cases, corporate consolidations have forced minority suppliers out of the supply chain all together. But Moore views this phenomenon with the objectivity of a seasoned strategist.  "The pressure to reduce the supply chain is not some diabolical plot to eliminate minority suppliers," declares Moore.  Instead, he sees the reductions in the supply chain as survival responses of corporations caught in the midst of enormous economic forces. 

But Moore's objectivity does not diminish his ability to assess the toll that certain strategies are having on small businesses, especially those that are minority-owned.  "Strategic sourcing is one business practice that carries a heavy toll," says Moore.  He sees strategic sourcing as an effective way to achieve substantial savings, but says those savings are squeezing necessary profits out of the supply chain.  He believes strategic sourcing is putting many suppliers and their subcontractors at risk.

Moore offered the following scenario to demonstrate the dangers of strategic sourcing for minority subcontractors. 

"Minority businesses must position themselves to meet the challenges of the marketplace," says Moore.  But he insists that major corporation must maintain their commitment to supplier diversity.  Moore believes supplier diversity managers can play a decisive role in achieving balance between strategic sourcing and continued minority utilization. "There are examples of companies that have achieve both goals," says Moore.  

As Moore considers the future of minority businesses, he advises business owners to increase their capacity through strategic alliances, co-ventures and acquisitions.  "In today's market place, strategic alliances, along with mergers and acquisitions, are necessary strategies for minority businesses to survive."

Moore also believes minority business owners will have to pay close attention to the fundamentals if they are going to survive. "There are scenarios where minority entrepreneurs simply have to say no to business.  You have to be aware of your costs and your margins," says Moore.  "If the margins are too thin, up front costs too high, or the service requirements too great, you have to be prepared to say no to that business."

The pressures on today's businesses do not detract from Moore's core optimism.  "There are challenges facing every business, declares Moore, "but we have to be innovate and work together to ensure our mutual survival."

The End

Over the past four years, GENLIGHT Por EL, Inc. and RGMA have worked together to assist Major League Baseball with the implementation of the Diverse Business Partners Program.