Supplier Diversity is one of the hot topics in Supply Chain Management. In doing business, you must make money. Making money, however, is not just the only consideration. Conducting excellent and fair business practices, awareness of social responsibility, and contributing to the greater good are now all hallmarks of good business. Most, if not all, subscribe to the basic tenets of business ethics.
It is imperative, then, that we teach our fellows proper business conduct while maximizing all the opportunities present. One of the things that we must maximize is using supplier diversity. Supplies are no longer just run by the “big guns.” Independent contractors and suppliers abound to give us that critical advantage we need while also promoting social responsibility.
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What is supplier diversity?
Supplier diversity is the idea that we can get what we need, not only from one or other established sources but from those who belong to the underprivileged and marginalized and minorities. We must establish contacts with them, and we must empower them to facilitate business opportunities, both for them and us.
It could go a long way in establishing employer trust, harmony, and social capital, all while conducting and doing business. We empower them and, at the same time, do business with them.
Essential steps to take to establish supplier diversity
Here are some of the ways we can take to establish supplier diversity in companies.
Get the leadership to go along.
Establishing supplier diversity must have the go-signal from the top echelons of the company. They are the ones who steer the company in whatever direction it would take. Having their support for this endeavor, then, is fundamental to its overall success.
It is even better if they will lead the initiative to establish supplier diversity. To make them take this step, explain to them all the benefits of having supplier diversity, both from a business standpoint and social and corporate responsibility. With the top honchos taking the lead, the company is sure to follow.
Have an excellent working plan
To convince the leadership and management to establish supplier diversity, you must submit an excellent, workable plan to be executed once it is in place. The plan will include policies regarding suppliers, those who can avail, benefit, or qualify to be suppliers.
Since the policy is about supplier diversity, those who belong to minorities and the marginalized, like women, should be given prime consideration.
Have a strategic working team to execute it
Have a team that could be relied upon to execute the policy regarding supplier diversity. The team will have the strategy and game plan, from communications and press releases, all the way to the execution of the policy. Part of the task is to disseminate information and advertise the supplier diversity program.
The working team will educate the public about their program and pique the interest of all the qualified suppliers. On the other hand, they will make sure that the company will also get good mileage in performing their social responsibility. That promotes social good while doing good business.
Bear in mind, however, that promoting social good by establishing supplier diversity is still the primary consideration.
Extend help to the suppliers
The suppliers the companies will target are primarily from the minority and marginalized. As such, they are usually at a disadvantage from the start due to the prevailing economic and societal conditions. It will be excellent if you extend support and lend them a hand. That could help your overall strategy of having supplier diversity in your company and others.
For instance, you can train the suppliers regarding the standard, prevailing company policies, norms, and expectations. You can teach and train them how to be competitive and maximize their comparative advantage over the others. Doing this, of course, must be without prejudice to the existing laws, proper norms, and other suppliers.
Orient the company towards diversity
The company itself must have and develop values conducive to diversity. Tolerating and promoting DEI must come from the company itself, if it wants the program to succeed, and if it wants to have supplier diversity. The company must promote values that tolerate differences and discourage exclusivity and discrimination.
It is better to have a team that will steer the company in this direction. It could be part of the overall strategic working team discussed above, adjacent to it, or an entirely separate one. Whatever the case, having a group that will specifically discuss and deal with diversity is a great plus and an excellent step towards establishing supplier diversity. The organization’s culture of diversity makes or breaks a supplier diversity program.
Tracking capable suppliers
A supplier, however, does not qualify just because it belongs to the minority, or the company needs to establish supplier diversity. Suppliers must be equally capable of delivering the goods and providing what is asked or expected of them. Companies and businesses must track all of those minority suppliers capable of delivering the goods, so to speak, to establish supplier diversity.
Once you have tracked them, you can establish contacts with them and have transactions with them. Having contacts does not necessarily mean that it will have to end up on the business table. You only have to establish ties and bonds with them, either by offering help or asking for theirs. Little things can go a long way.
Organize meetings and symposiums with diversity stakeholders
Events like these allow all of them to work things out, and if ever there are issues or problems, patch things up. It will allow companies and suppliers to talk to each other and deal with many matters, from business to society.
Companies can also organize events or activities that will empower the suppliers that belong to minorities and the underprivileged. It can be an academic talk, training, and seminars for those who belong to the minorities, who neither have the confidence nor the necessary skill to engage in supplying companies.
Develop trust and confidence with diverse suppliers
Companies can do this by imbibing a positive attitude towards diversity and promoting social and racial harmony, both in the workplace and in the community. They can do activities that geared towards promoting those things,
For instance, companies can do outreach programs and other activities to empower those who belong to the minorities and marginalized. They can partner with other stakeholders, like minority suppliers, who want to engage in corporate and social responsibility and promote social harmony.
Doing this will create goodwill among people and various social groups, including companies and minority suppliers. It will ease tensions between those who haves and have-nots. All will realize that everyone can do something to promote social harmony and a better life for everyone.
Activities such as these will endear the companies to those people and social groups and create a lasting bond, which is more than the usual business environment may provide. Trust is always an excellent social capital, and creating bonds and ties are ways of getting their trust. Companies that are trusted will quickly establish supplier diversity for them and others. Having supplier diversity in companies will contribute to the common good. The good goes beyond the usual confines of business and the workplace. It will create better opportunities for everyone, and promote goodwill and social harmony by tolerating diversity and having inclusivity.
What is Supplier Diversity?
Supplier Diversity is the diversity & inclusion best practice of increasing the variety and selection of diverse suppliers in the value chain process to provide an equal opportunity to become suppliers to major corporations.
Supplier diversity is not to give priorities to minority-owned-suppliers, but instead provide the equal opportunities to ALL Suppliers regardless their background, and promote LGBT diversity, gender diversity, racial diversity, disability diversity, and age diversity in the workplace.
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What is a Diverse Supplier?
Diverse Suppliers are value chain suppliers (business, or NGO) that are at least 51% owned and operated by an individual or group that is part of a traditionally minorities. Examples are small-business suppliers, minority-owned suppliers, and woman-owned suppliers, people-with-disability-owned suppliers.
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What are some Supplier Diversity tips?
- Get the leadership to go along.
- Have an excellent working plan
- Have a strategic working team to execute it
- Extend help to the suppliers
- Orient the company towards diversity
- Tracking capable suppliers
- Organize meetings and symposiums with diversity stakeholders
- Develop trust and confidence with diverse suppliers
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How to create supplier diversity