Why supplier-diversity programs make sense
Leading socially conscious companies are now cashing in on their early adoption of supplier diversity programs and their sincere approach to D&I as much more than a token gesture for feel-good public relations.
Coca-Cola currently spends more than $1 billion annually on diverse suppliers, establishing a supplier-development institute to educate small, disadvantaged groups on how to start businesses and the STEP initiative to support women entrepreneurs through training, education, and mentorship.
As a result, Coca-Cola found that individuals that were aware of their supplier diversity initiatives were 45% more likely to see the brand as valuing diversity.
Awareness of their supplier diversity programs results in 25% of their business partners more likely to think favourably of the brand and 49% of their target market more likely to use Coca-Cola products.
Tangible savings with MWBE partners
Research by multinational management consulting firm McKinsey & Co. has revealed a tangible increase in cost savings of 8.5% and growing year on year for leading procurement firms actively engaging in partnerships with minority and women-owned business enterprises (MWBEs).
Most US organizations can expect to save between 3-7% on procurement costs when adding MWBEs to their supplier networks, said McKinsey researchers.
(Source: McKinsey & Co. May 17, 2022)
Data from top US management consulting firm Bain & Company confirms a widespread increase in procurement spending on diverse suppliers has risen by more than 54% across all industries over the past five years, resulting in average savings of 0.7 percentage points off total procurement expenditures for the top quartile of spenders compared to their peer group.
(Source: Bain & Company April 28, 2021)
Supplier diversity boosts profits and retention rates
Other early adopters of diverse supplier pools have seen their bottom lines improve and enjoy a 20% higher annual retention rate, among other tangible advantages.
Xist4 is a diverse supplier specialising in sourcing professionals from a broad spectrum of sectors and backgrounds to fill key positions in C-suite, mid-senior level digital, technology and engineering roles. If you would like to know more about our approach and insights on this subject, contact me on +44 (0)117 924 4408/ +44 (0)207 205 2211 or email firstname.lastname@example.org
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