Supplier diversity is a fairly new term in the United States, but the idea itself is not. Supplier diversity is an equal opportunity initiative designed to enhance a company’s ability to engage qualified minority and female suppliers. This is a movement that encourages the hiring of qualified minorities and women within a business entity to help support a company's overall growth. Many countries such as Canada and the United Kingdom have had supplier diversity programs in place for years. These programs not only represent a means for corporate social responsibility (CSR), but also present an opportunity to optimize business objectives globally.
For example, these programs can significantly reduce operational costs and improve financial results by providing access and inclusion into diverse and qualified supplier networks. What is even more exciting is that these positive outcomes extend far beyond just supply chain management and can create value for your organization across many other dimensions – from marketing to recruitment to legal. It is no wonder why supplier diversity has been a topic of much discussion among procurement officers and diversity advocates alike in the last decade. If you are interested in starting a supplier diversity program, these are few things that you must do:
- Examine Your Company Culture
Before stepping out the door to begin the journey towards supplier diversity, it is important to look at your company culture. Supplier diversity program success requires a culture that encourages and celebrates differences. Organizations that thrive in their supplier diversity and inclusion efforts have a corporate culture that fosters and encourages the collaboration and communication required of diverse suppliers that will ultimately lead to new strategies, innovation, and operational excellence. A comprehensive supplier diversity program also needs to include strategies to retain minority suppliers into the opportunities that result from the program and to keep minority-owned firms in business.
- Get Executive Support
It is never easy pitching your company on a new initiative such as a supplier diversity plan. Business executives are often too focused on day-to-day operations to see the value of supplier diversity. You can help them understand the value of supplier diversity by arming yourself with good data, providing accurate, real-life examples and providing competitive information on major suppliers. Well-crafted information allows you to place supplier diversity at the top of your executive agenda. After all, why do business with companies that are not diverse if you have no commitment to their success?
- Identify Diverse Suppliers
When you are just beginning to build your supplier diversity program, it can be overwhelming. What contractors or suppliers should you partner with? Which counties should you focus on first, and which states should you ignore? Understanding the potential diversity of supplier options is important to building a successful diversity program. By understanding how diverse some suppliers are, you gain an opportunity to offer certain suppliers more work. While some suppliers may be more able to meet your firm’s diversity needs, some opportunities are pivotal to grow the network of diverse firms that your organization works with. Depending on your firm’s specific needs, supplier diversity programs can be implemented as a one-time activity or as an ongoing strategy to increase the pool of diverse firms that you work with.
- Invest Time into the Supplier Diversity Program
When a company creates a supplier diversity program, whether they have been asked to develop it by outside interests, or have chosen to develop one independently, this often requires a significant time investment. Putting together a supplier diversity program is not as simple as deciding what kinds of supplies you are looking for and sending out a Request For Proposal (RFP) to see who can give you the best deal. Supplier diversity programs should be built taking into consideration various issues that exist within diverse markets that may result in non-competitive bidding conditions. In addition to this, you will need to invest time in developing a program for training, mentoring, and networking.
- Establish Goals
Establishing goals for your supplier diversity program is key to make sure your business is getting the full benefits of this important initiative. When you can see what you want to achieve, it is a lot more likely you will be able to get it. If your organization does not have clearly defined goals, supplier diversity will simply disappear as a regular part of doing business. Many organizations set out with the best of intentions but find themselves losing any gains to become dangerously low in their participation rate because they did not have clear-cut goals to begin with.
Conclusively, is a supplier diversity program a good thing if you have one? It absolutely is!Supplier diversity encourages greater participation by women and minority-owned businesses. The program makes doing business with your company very attractive for companies owned by these groups. It can benefit not only companies who are able to better diversify their workforces, but also communities by opening up jobs to new people.