April is Celebrate Diversity Month, which started in 2004 to recognize and honor the diversity surrounding us all. Diversity can be recognized in many ways – from self-expression, to a difference of opinion, to choosing diverse suppliers – but one thing is certain, we celebrate diversity in hope that people will gain deeper understanding of the diverse group of backgrounds and cultures.
As for procurement, supplier diversity programs are just as important to recognize (and celebrate). Today, supplier diversity programs are implemented to increase the quality of supplier relationships, encourage innovation with increased competition, and help companies sustain and build brand loyalty spend all at the same time.
But like other aspects of supplier management, effectively managing diversity requires the right combination of analytics, business intelligence and supplier enablement tools to create linkages, gain insights and make key advancements in a supplier diversity program. Supplier Diversity is the practice of sourcing products and services from suppliers who are at least 51% owned and operated by one of the following categories or ethnicities:
- Minority-owned businesses
- Woman-owned businesses
- Previously under-used suppliers
- Disabled-owned businesses
- Veteran-owned businesses
- Small business enterprises
- Small disadvantaged businesses
- LGBT business enterprises
Supplier Diversity programs can exist and mean something different for every company, but any company doing business today should understand the demographics of its customer base. In fact, companies that embrace diversity and establish early success in this area will have a competitive advantage in the future marketplace. Below are three reasons why you should implement a supplier diversity program today:
- Gain Public Support and Attention: Supplier diversity programs help companies make responsible business decisions that gain public support and attention
- Enhance Innovation: Companies can enhance innovation by developing strategic alliances and partnerships with diverse suppliers
- Drive Better Business Decisions: Supplier diversity programs strengthen the supply chain through driving better business practices and connecting organizations with new (and more) industry connections
According to Diversity Direct, world-class procurement organizations commit 33% or more of their spend to diverse suppliers. But despite growing diversity trends, only about 10% of all companies access the impact of supplier diversity efforts on revenue or market share. Don’t miss out on the impact a supplier diversity program can have in your company – learn how to get started!