Diversifying your suppliers provides business benefits, as well as benefits to the local economy and marginalised business owners. Business benefits can range from loyalty from employees and customers who recognise the importance of supply chain diversity and sustainability. As well as, providing innovation within your supply chain and local sourcing which can reduce costs. By including women, LGBTQ+ people, ethnic minorities, and other marginalized groups in the supplier market, the competition increases, and with it product quality with lower prices. Overall stimulating the economy for a diverse range of business owners and possibly accessing untapped markets.
Achieving supplier diversity does not happen overnight, nor does it happen by accident. Supplier diversity programs can be tailormade for your company to begin this process. These programs require commitment, time and effort, but will yield positive results for your business and society.
Here are some key elements of a supplier diversity program:
Data collection: understanding how to make an effective supplier diversity program comes first from understanding your supply chain. Collecting data about all of the businesses you currently supply from, who owns them and who operates them will be hugely advantageous in this process. It is also vital to be transparent about this information, for yourselves and others.
Analysis: Once you have the data, you can find out the areas that your company can be doing better. Maybe you’re lacking women owned businesses, so that is a great place to start. Create a report with the data in order to clearly see where you are doing well, and where you need improvement.
Set targets: Company wide policy will hold your business accountable. Write down definitive goals, maybe a certain quota of women owned businesses in your supply chain by a certain deadline. Make sure these goals are trackable and achievable.
Commitment: Everyone needs to be on board with this program, so ensure there is company wide communication. Have meetings, workshops or training to create awareness and commitment throughout the whole team. Keep everyone up to date on policy, reports, data and advancements.
Support suppliers: As some of these marginalised businesses are trying to break into the market, assist them. Actively seek out diverse suppliers, even if they are smaller businesses and don’t be afraid to give them contracts over larger enterprises. Utilize trade networks and trade fairs that can help connect you to minority owned businesses.
Capacity building: empower your suppliers with capacity building measures. Assist them with information, answer queries, listen to concerns, give training or workshops in order to build capacity and create a mutually beneficial working relationship.