What is supplier diversity, and why should you care?
Supplier diversity programs
A company with a 'supplier diversity program' aims to proactively establish business relationships with minority-owned businesses and encourages other organisations in its supply chain to source goods and services from other SMEs and localised businesses.
On the surface, encouraging supplier diversity propagates equal opportunities and fairness throughout the supply chain. More compelling are the positive changes a supplier diversity program brings to organisations large and small in the long term.
Supplier diversity: the roots of sustainable success
Seeking supplier diversity brings many benefits to businesses, the supply chain and local communities. Diversifying your supplier network makes good business sense because it promotes the development of a truly sustainable corporate culture. Here are four key benefits to think about:
1) Broker better deals
Shopping for alternative suppliers naturally creates competition among them and increases your profit potential as you learn about suppliers closer to localised sources at more affordable rates.
2) Diversify to expand
As you diversify your supplier base, you expand your network of B2B suppliers and penetrate new niches related to their diversified markets. With increased exposure for your business, you'll gain more new customers
3) Multiply your supply channels to scale up
You want to scale up operations, so why stick with one supplier when you can rely on a variety of suppliers to ensure you can always deliver as your customer base grows?
4) Benefit from contributing to localised economic growth
Sourcing minority-owned suppliers and diverse SMEs in your supply chain gives your business a human face that fosters more rewarding business relationships. You'll demonstrate your company's commitment to economic growth in local communities, and you'll earn loyalty from those supporting your business, which is fundamental to your ongoing success.
Some supplier diversity champions you might know
Diversity in the supply chain is being proactively pursued and established by many of the world's leading multinationals, who are committing billions of dollars to supplier diversity programs that aim to partner with minority ethnic-owned, women-owned, veteran-owned, and LGBT-owned businesses and other historically underrepresented enterprises.
Wide-swept demand for equal opportunity through diversity and inclusion (D&I) is growing across all industry sectors. Numerous Fortune Global 500 companies are among the top organisations recognised as supplier diversity champions, including oil and gas giant BP; pharmaceutical companies Johnson & Johnson and Merck; info-tech innovators Accenture, IBM and Intel; consumer goods corporation Procter and Gamble; carmaker Ford and professional services provider Ernst & Young (EY).
Long-term sustainability is the overall goal of supplier diversity programs. They ensure corporate longevity with continual growth fostered through meticulous sustainability planning, mentoring, robust second-tier programs, training and scholarships, plus educational opportunities to expand their database of qualified diverse suppliers.
Good track records gain trust
Proclamations of championing supplier diversity aren't enough to cut the cloth and partner with leading D&I-focused multinationals. Suppliers have to meet stringent benchmarks to qualify as diverse suppliers. They must have a well-documented, proven track record of transparency, progressive work ethics and employee safety.
These strict guidelines ensure that the diversity drive doesn't stall at the first minority-owned business partnership but is perpetuated throughout the entire supply chain, with each entity continually demonstrating its commitment to the supplier diversity ethos.
Ready to scale up?
Sustainable growth is the ultimate goal for any business. Strategic supplier diversity programs are fundamental to future success as you expand your network of vetted professionals and scale up operations.
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