WRITTEN BY SPENCER COWLEY, WRITER & EDITOR AT BYVI
Products ranging from coffee to computer chips require the labor of millions to harvest raw materials and manufacture goods — and some of those materials, like cobalt from the mines of the Democratic Republic of Congo, are being produced through exploitative supply practices that primarily harm minorities who are far removed from the less diverse supplier companies. Child labor and sweatshops are well-known examples of major companies skimping to keep costs low and maximize profit.
With issues of diversity and ethical production in the supply chain now so prominent in the public discourse, the time has never been better — and the need has never been clearer — for businesses to address their own supply plans.
A diversity-based approach to the supply chain must become a priority for every business that wants to ensure an ethical footprint. And though eliminating harmful practices is crucial, there are more benefits to partnering with suppliers of diverse backgrounds than meets the eye.
The most pressing problem? Bridging the gap between small, diverse suppliers and major business buyers is far from simple.
Ellect is an Australian-based startup that promises to bridge that gap, connecting medium to large size buyers with small to medium size suppliers owned and operated by women and other minorities. Ellect’s marketplace offers a convenient digital platform that buyers can use to source products for their businesses, confidently knowing that they are directly funding suppliers of diverse backgrounds and gender equality projects.
Where does diversity fit into the supply chain?
Sandra D’Souza, founder of Ellect, remembers when her family emigrated from Hong Kong to Australia when she was a child. She recalls witnessing incidents of racism and discrimination first-hand in her new home country. While the world has certainly grown more aware of and outspoken about discrimination based on race, gender and sexuality since her childhood, discrimination still exists in the everyday lives of most minorities. And many businesses around the world still carry this discrimination into their hiring and supply practices, prioritizing cost-efficiency above diversity, equity, and inclusion (DEI).
In 2018, D’Souza saw that the United Nations released their annual Sustainable Development Goals report, which included a goal focused on reducing inequality in the workplace globally. Gender inequality, specifically, was a major target, and it’s one that D’Souza felt called to address.
D’Souza already owned a small but successful marketing agency, but she wanted to establish something new and powerful — a business-charity hybrid that could tackle inequality head-on and create real change on a number of fronts. However, she knew that inequality in business wouldn’t be a simple fix; it would take a unique, tangible approach to one lacking part of the system to jumpstart a chain reaction.
With so many stories of harmful supply practices surfacing, one of the clearest places to start promoting greater inclusion emerged in the connections that businesses made with their various suppliers.
A small business owner and female founder herself, D’Souza recognized that opportunities for new partnerships were so often dictated by pre-existing relationships and prejudices that diverse suppliers were consistently struggling to keep up with their major, white male-led counterparts.
Through her research, D’Souza also discovered that the notion of cost-efficiency as a driving factor for the lack of diversity in the supply chain was misguided. One study has shown that businesses who have the least amount of cultural and gender diversity are 29% less likely to achieve above-average profitability. Another analysis from Boston Consulting Group suggested that the global GDP could be increased by anywhere from $2.5 trillion to $5 trillion if men and women participated equally as entrepreneurs — but the mentoring and networking for women was severely lacking and provided far less opportunities for them to get started.
Establishing greater diversity in business, including the supply chain, is both more cost-efficient and inclusive in the long term. To D’Souza, this dual opportunity led her to found Ellect.
How Ellect offers a diverse approach to the supply chain
What makes Ellect truly unique is that it was created to wholly serve the public good through a direct impact on increasing diversity in the supply chain and funding further progress toward making the world of business more equitable and inclusive. The company leads by example — which many companies fail to do even when they pledge to improve their stances on DEI — with its model of donating a portion of every transaction from its marketplace to fund gender equality projects.
D’Souza began the project of Ellect back in 2018 with a tech focus in mind. Modern life is so integrated with technology that streamlines every task, so the company grew out of her desire to grow beyond her marketing roots and create a tool that anyone could use to actively improve their business practices without much hassle. After multiple builds and rebuilds over the course of a couple years, the new Ellect marketplace finally took shape in spring 2021.
Ellect’s Supplier Diversity Awards 2021 gives the best opportunity for your small diverse business to be recognised for your achievements and hard work.— Ellect (@Ellect_biz) July 13, 2021
Nominate your or someone else’s business now: https://t.co/o27Wop73Am
#supplierdiversityawards #SMEs #ELLECT #SDA2021 pic.twitter.com/UOgnVZOyin
Ellect also goes beyond the tech platform it is building its reputation on — D’Souza wanted the organization to have a personal touch, too. Ellect’s team encourages buyers and suppliers to overcome any hesitancy they may have about the platform by bypassing the marketplace and developing diverse supply connections directly. Essentially, D’Souza and her team are happy to facilitate the networking offline if it means a buyer will start partnering with smaller, diversity-led businesses.
The benefits of Ellect are valuable for buyers and suppliers alike:
For buyers, they can utilize Ellect as a convenient means of discovering a variety of new suppliers with whom they can feel good about partnering. Plus, Ellect will help the buyers track their environmental, social and governance (ESG) goals, which will be increasingly important as countries begin to prioritize and legislate ESG for all companies.
For suppliers, Ellect offers a greater chance to find new business and break into the corporate world, which can be especially difficult when the owners come from diverse backgrounds and lack a strong existing network. Suppliers can earn greater visibility and enhance their business through more sales on Ellect’s marketplace.
D’Souza and Ellect are already making strides in their efforts to increase diversity in the supply chain. The marketplace is gaining momentum and more buyers and suppliers are joining the movement. D’Souza herself was featured as one of thirteen entrepreneurs in Nasdaq’s Milestone Makers program, bringing Ellect even greater global exposure. Ellect has also begun to host events like their Supplier Diversity Awards 2021 that featured standout suppliers in several categories of diversity.
What’s Next for Ellect
Ellect is Australia-based but also a global project, and D’Souza now hopes to take Ellect into the diversity-focused U.S. market where she hopes to continue to globalize the company and increase the company’s membership. D’Souza strongly believes that the United States understands the importance of diversity due to the country’s unique history, so it will be the perfect next stepping stone for Ellect’s efforts to expand and thrive.
Like any social movement, the movement to increase diversity in the supply chain needs the support of the masses, governments and major corporations to truly effect change on a tangible scale. With Sandra D’Souza at the helm of this diverse startup and a growing global trend toward greater inclusion, Ellect has every reason to believe that their mission is achievable on a grand scale.