Consumers are becoming more and more vigilant about the products they purchase. From clothing skin careShoppers are asking deeper questions about the products they buy and the companies they support: Are workers treated fairly and provided with a safe environment? Does the company have a commitment to diversity, equity and inclusion? Do the company’s values align with mine? 41% of shoppers Shifted at least 10% of its business away from retailers that were not aligned with its inclusion and diversity values.
Can be strengthened Brand loyalty Meeting growing consumer demand for inclusive and ethical practices while driving innovation, resilience and social impact that positively impacts our business.
What is supplier diversity?
Supplier diversity is a proactive business strategy of sourcing goods and services from businesses that are at least 51% owned by traditionally underrepresented groups, such as women, minorities, LGBTQ+ people, and people with disabilities.
The benefits of supplier diversity
Supplier diversity offers benefits beyond meeting consumer expectations. By partnering with businesses owned by minorities, women, and other underrepresented groups, companies often enjoy the following benefits:
Increased innovation and creativity
Partnering with minority-owned businesses fosters innovation. By tapping into the fresh perspectives of diverse business owners, you can capitalize on creative ideas and novel problem-solving approaches. Latest Data According to the National Center for Science and Technology Statistics and the Census Bureau, 11.8 percent of minority-owned businesses are product innovation companies, compared with 8.7 percent of non-minority-owned businesses.
For example, a food manufacturer that partners with a minority-owned supplier that specializes in local spice blends may be able to more easily create a product line that showcases the unique flavors of the supplier’s community than a manufacturer that doesn’t have access to those spices or the know-how to create the blends.
Expanding market reach and customer loyalty
By connecting businesses with diverse ownership and supply chains, we can better understand and respond to different needs. Customer Segments You can build a more diverse customer base. These suppliers can provide valuable insight into the preferences and nuances of your community, helping you optimize your products, services, and marketing. Marketing Strategy.
Improving supply chain resilience and competitiveness
A diverse supplier base is a key component of a strong, resilient supply chain. Diversifying your sourcing will help you build a stronger supply chain. Supply Chain Strategy This reduces the risk of disruptions from events such as economic downturns or natural disasters.
Working with diverse businesses promotes healthy competition and challenges suppliers to improve cost efficiency, quality and service delivery, ensuring businesses have access to the best solutions to stay competitive.
Talent Acquisition and Retention
Embracing supplier diversity gives you an edge in the competition for top talent. Demonstrating a commitment to diversity, equity, and inclusion (DEI) principles across your organization. Business OperationsWith the cooperation of all stakeholders, including our supply chain, we can enhance our reputation as an inclusive and socially responsible employer.
This may resonate with candidates who prioritize companies whose values align with theirs. Existing employees from diverse backgrounds may want to feel valued and represented, develop a sense of belonging, and Employee Retention.
Positive impact on society and the economy
Our supplier diversity initiative promotes economic empowerment and opportunity for historically underrepresented businesses. By proactively seeking out and providing business opportunities to minority-owned businesses, we foster job creation, wealth creation, and the overall development of diverse communities.
This is your company’s Corporate Social Responsibility It demonstrates your company’s commitment to achieving its goals and creating positive, lasting change.
What is a Supplier Diversity Program?
Supplier diversity programs are business initiatives undertaken by organizations to seek out and engage diverse suppliers. These programs often use third-party certification organizations to verify ownership status.
By implementing a supplier diversity program, companies can tap into a wider pool of suppliers and promote financial inclusion in their supply chains.
Tips for promoting supplier diversity
To maximize the benefits of supplier diversity, it needs to be an ongoing effort, not a one-time effort. Here are some tips for implementing a successful supplier diversity program.
Ensure executive buy-in and support
For a supplier diversity program to be successful, you need executive buy-in and support from the start. When making the case for supplier diversity to executives, investors and other stakeholders, focus on the tangible benefits, such as increased innovation, access to new markets and improved brand reputation, that a diverse supplier base brings.
Highlight how supplier diversity aligns with the company as a whole. Mission Statement, Core Valuesand DEI initiatives.
Set clear, measurable goals
As you establish your supplier diversity program, set specific, measurable goals for partnering with diverse suppliers. Consider goals such as:
- Increase spending on certified diverse suppliers by 20% within the next 12 months
- Increase the number of diverse suppliers in our database by 50% by the end of the fiscal year
- Ensure that at least 30% of Tier 1 suppliers are diverse within the next 24 months
- Begin supplier outreach with at least 15 women-owned businesses during the third quarter
Establishing a dedicated supplier diversity team
Create a dedicated team to drive your supplier diversity initiative and ensure that your suppliers reflect the diversity you want. Include representatives from various departments, such as procurement, finance, and marketing.
Provide the team with the resources they need including budget, training, access to supplier database, etc. Responsibilities will include building relationships with diverse suppliers, participating in supplier diversity events and educating them on best practices.
Partnering with a variety of supplier certification organizations
Partnering with diverse supplier certification organizations allows you to identify and connect with diverse owner-certified businesses. These organizations provide valuable resources, support, and networking opportunities to help you grow and sustain your supplier diversity program.
Here are some organizations to look into:
Develop a comprehensive and diverse supplier database
To streamline your procurement process and connect with qualified companies, create a list of the different suppliers you want to work with and share it with others. Create your own database with key capabilities, certifications, and contact information.
Spirited AwayFounded by Douglas Watters, is one of New York City’s innovative non-alcoholic bottle shops. Douglas was fascinated by non-alcoholic beverages and Dry AtlasIt serves as a supplier database introducing a variety of alcohol alternative businesses.
“By creating a directory on Dry Atlas, we hope to standardize and make the sector easier for consumers around the world. The site features around 1,100 different non-alcoholic drinks. It features most of the world’s non-alcoholic spirits, wines, beers and cocktails, and features a lot of content, articles and interviews that we hope will help educate consumers,” Douglas said. Shopify Master Podcasts.
“We just came out of Hong Kong and tried some really amazing sparkling teas that were made for social occasions. It was really interesting to see how the tea culture of those places has permeated into the cocktail culture as well.”
Promoting the program to attract diverse suppliers
To attract diverse suppliers, actively promote your supplier diversity program through targeted outreach. Share success stories and case studies that detail how your company has benefited from working with diverse suppliers, highlighting their unique capabilities, innovation, and contributions to your success.
Instead of simply touting what you do, focus on highlighting the potential of diverse businesses. Social Media PlatformsShare these stories through email, industry publications, and diversity-focused media to demonstrate your supplier diversity commitment. Encourage diverse suppliers to register on your company’s supplier portal and actively leverage this database to identify potential partners for upcoming sourcing opportunities.
Supplier Diversity FAQs
Why is supplier diversification important?
Supplier diversity supports economic inclusion by fostering innovation, increasing supply chain resilience and providing opportunities for diverse businesses.
How do you determine if a company has diverse suppliers?
To determine if a company has diverse suppliers, look for information about their supplier diversity initiatives on their website, search for case studies or press releases that highlight partnerships with diverse companies, or contact the company’s procurement or diversity and inclusion departments directly.
How do you get started with a supplier diversity program?
To launch a supplier diversity program, secure executive support, set clear goals, establish a dedicated team, and develop a process for identifying, engaging and supporting diverse suppliers.
