Supplier Diversity Program

What is a Supplier Diversity
Program?
In today’s increasingly diverse and multicultural society, the modern business

community recognizes the need for growth-minded businesses to embrace that
same diversity in their business practices. Within the procurement function,
building a supplier diversity program supports a range of potential social and
financial benefits for savvy businesses willing to commit to inclusion, equal
opportunity through a supply chain built with diverse businesses.
How Supplier Diversity Programs Benefit

Businesses
In business, as in life, stagnation and homogeneity can lead to decline in
productivity, a lack of innovation, and, ultimately, the demise of the stagnating
https://planergy.com/blog/supplier-diversity-program/
1/7
group. Experts have long acknowledged the boost to profits, reputation, and
innovation that accompanies a diverse staff. But for companies looking to further
increase both their social capital and their bottom line, a supplier diversity
program is a gateway to even greater success.
By creating a program that actively seeks and incorporates diverse

suppliers—including businesses owned by minorities, women, persons with
disabilities, armed services veterans, and members of the Lesbian, Gay, Bisexual,
and Transgender (LGBT) community—a business gains fresh perspectives and
opportunities to penetrate previously untapped markets. In addition, a diverse
supplier base demonstrates a company’s willingness to honor the social contract
and the obligations of a responsible business in a marketplace made up of
consumers from all walks of life.
And while diversity might seem like a hard sell to “old guard” upper management
concerned about the capabilities or reliability of diverse suppliers, ignoring
diversity can put a business significantly behind the curve set by both
governments and corporate leaders such as Disney, Walmart, and Proctor &
Gamble. Organizations like these pour billions into supply chain diversity in
search of reputational and financial gain.
In fact, a 2016 study conducted by the Hackett Group found that:
On average, supplier diversity programs generate a return of $3.6 million

in profits for every $1 million spent.
70% of surveyed businesses viewed supplier diversity as critically
important to reputation management and profitability; 43% were seeking
“unique market insights” from their diverse supplier base, and 40%
sought to improve both customer service and internal process efficiency
through the use of local and diverse suppliers.
Nearly all (99%) of diverse suppliers met or exceeded performance and
reliability expectations; 23% exceeded those same expectations.
2/7
The more investment is made in supply chain diversity, the greater the
return on investment (ROI). Companies allocating 20% (or more) of their
spend to diverse suppliers could connect between 10 and 15 percent of
their annual sales to their supplier diversity programs, while those
spending less than 20% only saw a 5% return on average.
Supply chains built by world-class procurement teams dedicate 33%
more of their spend to diverse suppliers as compared to average and
underperformers.
These benefits are not exclusive to global megacorporations, of course. Small

businesses benefit on both sides of the supply chain thanks to support from
organizations like the U.S. Small Business Administration (SBA), National
Minority Supplier Development Council (NMSDC), National Gay and Lesbian
Chamber of Commerce (NGLCC), and the Women’s Business Enterprise National
Council (WBENC).
These entities help minority business enterprises (MBEs), women business

enterprises (WBEs), and historically underutilized businesses (HUBs) achieve
certification and supplier registration for consideration as Tier I (direct
contractor) and Tier II (sub-contractor) vendors.
Additionally, the U.S. government’s 8a Business Development Program helps

small disadvantaged businesses gain bidding access for sole-source sole-source
government contracts.
Certified members of these organizations cast a very broad net of potential

suppliers for the business looking to build its supplier diversity program. As of
2019:
The WBENC has more than 15,000 registered businesses on its

membership rolls.
The NGLCC reports LGBT-owned businesses generate more than $1.7
3/7
trillion each year for the U.S. economy alone.
The NMSDC connects buyers with more than 12,000 registered
businesses owned by African-American, Asian, Hispanic, and Native
American entrepreneurs.
Experts have long acknowledged the boost to profits, reputation, and innovation
that accompanies a diverse staff. But for companies looking to further increase
both their social capital and their bottom line, a supplier diversity program is a
gateway to even greater success.
Implementing a Diverse Business Supply

Chain
If your company’s focused on building value through a diverse supplier base,
implementing some best practices used by world-class procurement teams can
help you get there.
Educate your procurement team, management, and organization as a

whole on the massive potential value created a supplier diversity
program.
Build strategic and enduring relationships with local vendors. Partner
with those who provide access to new markets or innovative ideas for new
goods and services.
Collaborate with other companies seeking supplier diversity. Attend
conferences, roundtables, and other information-sharing events to
network with diverse businesses while expanding your own knowledge
base.
Identify and target potential suppliers by connecting with resources such
as the WBENC, NGLCC, and NMSDC. Make recruitment and inclusion of
these suppliers a priority, including the development and implementation
4/7
of documentation for potential suppliers such as the criteria, guidelines,
and code of conduct for diverse enterprises established by the College
Board.
Leverage social media intelligently to connect with new potential
customers, diversity organizations, and diverse suppliers.
Familiarize yourself with the supplier diversity program(s) established by
your local, state, and federal governments, as well as programs from the
SBA and other small business-focused organizations. If your business is
seeking to land lucrative government contracts in the United States, the
federal government requires that a contractors for projects exceeding
specific dollar amounts must achieve government-mandated levels for
diversity spend and demonstrate a commitment to diversity in their
operations, hiring, and corporate citizenship practices.
Include technology such as a dedicated, cloud-based procurement solution
in your overall procurement plan. In addition to process improvements
from automation and artificial intelligence (AI), supplier management is
greatly improved with detailed and process-driven supplier registration
and evaluation.
In addition, managing your supply chain database with advanced AI
makes it much easier to find and connect with those suppliers (both Tier I
and Tier II) who meet diversity requirements for government contracts.
Finding, for example, a woman-owned business located in rural Georgia is
much easier with centralized, on-demand data management that
incorporates critical diversity-related data such as government
certifications, membership in minority business organizations, and third-
party certifications from the start.
Make Diversity Part of Your Procurement
5/7
Plan
A diverse supply chain is a healthy, productive, and responsible source of lasting
social and financial value for your business. Focus on adding diversity to your
procurement, and build stronger relationships, a glowing reputation, and greater
profits while supporting economic success for all.
What’s your goal today?

1. Use PLANERGY to manage purchasing and accounts
payable
We’ve helped save billions of dollars for our clients through better spend
management, process automation in purchasing and finance, and reducing
financial risks. To discover how we can help grow your business:
Read our case studies, client success stories, and testimonials.

Visit our “Solutions” page to see the areas of your business we can help
improve to see if we’re a good fit for each other.
Learn about us, and our long history of helping companies just like yours.
Book a Live Demo
2. Download our guide “Indirect Spend Guide”

Download a free copy of our guide to better manage and make savings on your
indirect spend. You’ll also be subscribed to our email newsletter and notified
about new articles or if have something interesting to share.
download a free copy of our guide
6/7
3. Learn best practices for purchasing, finance, and more
Browse hundreds of articles, containing an amazing number of useful tools,
techniques, and best practices. Many readers tell us they would have paid
consultants for the advice in these articles.
Related Posts
7/7

Supplier Diversity Program

Uploaded by

Copyright:

Available Formats

Supplier Diversity Program

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Supplier Diversity Program

Uploaded by

Copyright:

Available Formats

What are the benefits of supplier diversity programs?

What are the benefits of supplier diversity programs?

How can businesses build successful supplier diversity programs?

How can businesses build successful supplier diversity programs?

What is a Supplier Diversity

In today’s increasingly diverse and multicultural society, the modern business

How Supplier Diversity Programs Benefit

By creating a program that actively seeks and incorporates diverse

In fact, a 2016 study conducted by the Hackett Group found that:

On average, supplier diversity programs generate a return of $3.6 million

These benefits are not exclusive to global megacorporations, of course. Small

These entities help minority business enterprises (MBEs), women business

Additionally, the U.S. government’s 8a Business Development Program helps

Certified members of these organizations cast a very broad net of potential

The WBENC has more than 15,000 registered businesses on its

Implementing a Diverse Business Supply

Educate your procurement team, management, and organization as a

Make Diversity Part of Your Procurement

What’s your goal today?

Read our case studies, client success stories, and testimonials.

Book a Live Demo

2. Download our guide “Indirect Spend Guide”

download a free copy of our guide

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.