On March 29, 2018, AmCham Belgium hosted its first event in a new SME Series at Cargill’s offices in Mechelen, focused on helping small companies grow and do business with larger, multinational corporations. Eddy Bonne, Managing Partner at Romulus, and Anne-Sofie Van den Born-Rehfeld, CEO of The Library Group, co-moderated an interactive roundtable discussion with sourcing representatives from Cargill.
The event started with a short introduction of Cargill and their product portfolio: from food products and ingredients to animal nutrition and agricultural solutions. The traders are responsible for buying ingredients for their food and other products, but all other indirect spend is handled by procurement. This category includes inter alia legal advice, HR services, recruitment expertise, travel, and communications consulting. The next question is, of course: how does a small business (SME) prepare to work with such a large multinational corporation (MNC)?
The first step is to find out whether your product or service falls into a category for which a multinational company is sourcing locally. Some products or services are sourced on a global or regional (e.g. European) level, but there is also room for locally-sourced products or services. Local sourcing is mostly used for services, which are also country-specific and require local expertise or a local network.
A multinational company is usually pretty clear on what they need: their procurement department identifies the specific business need and translates it into an inquiry listing what they want to buy, the qualitative standards they are looking for, compliance regulations and the company’s code of conduct.
But how does a small company or a new product or service get on the radar of a larger company? Cargill’s representatives explained they start their sourcing process by conducting an external market intelligence analysis, which is a good way to learn about innovations, and they also spend time going to events to learn about new products or services.
Anne-Sofie Van den Born-Rehfeld, CEO of The Library Group, also shared an example of her own. Once the first well-known company had used her company’s services, this had a snowball effect: once that first big name was through the door, other multinationals were more comfortable doing business with her small company, which illustrates the importance of a good reference. Sourcing and procurement departments of MNCs will often ask for references from previous clients and will provide references to other multinational companies as well.
Another way to do business with a MNC is through a ‘middle man’ – for example, an intermediary company which has the contract with the procurer and manages all the different suppliers to fulfil that contract. Several small companies could also to form a consortium, providing one invoice and competitive pricing – all with the aim to simplify invoicing, account management and data flows for the procurer.
This was our first event specifically aimed at small and medium-sized enterprises in our SME Series. Do you have any suggestions or ideas for future events in this series? Don’t hesitate to leave us a message below or contact Dawn Smith at the Secretariat for more information. We would also like to thank Cargill for kindly sponsoring our first SME event.