The term ’supplier diversity’ emerged in the 1960s as a result of the Civil Rights Movement, both in the US and elsewhere. More than half a century later, many organisations still approach this idea in terms of compliance and regulation. Now, however, procurement professionals should be honest and ask whether their supplier diversity programmes are fit for purpose.
You need to ask some hard questions to maximise your strategic sourcing goals. At ConnXus, we have worked with companies throughout the world to develop a checklist to help procurement teams determine the state of their supplier diversity programmes:
- Do you have an individual or a group responsible for supplier diversity and inclusion? Having a steering committee or someone in charge improves accountability and helps ensure the correct processes are in place.
- Is supplier diversity a part of your business objectives or goals? Building a business case can help tie the programme into everyday operations and maximise the strategic sourcing process.
- Is supplier diversity a part of performance reviews? Having common goals may improve channels of communication and business efficiency.
- Do you have C-suite buy-in and a culture of diversity? The organisation’s leadership tend to set the tone; any programme going against the corporate culture will fail.
- Do you have the technology to support a thriving supplier diversity programme? Technology may consist of a few different systems:
- Diverse supplier portal(s), where diverse suppliers can register, and have their diverse certificates validated.
- Spend analysis systems, which can determine opportunities for your organisation to identify and recruit diverse suppliers
- A Tier-2 tracker involving Tier-1 suppliers, to identify potential diverse suppliers.
- Communication platforms, to engage with diverse suppliers.
- Do you allow your diverse suppliers to be involved in key discussions and are they engaged with you? Often overlooked, buyer-supplier relationships that move beyond contractual obligations may benefit both parties through cost reduction and innovation.
- Do you measure the impact of your diverse suppliers in the communities that you live, serve, and work in? Analysing the economic impact of your diverse spend helps paint a clearer picture of the way your business affects the wider community in which it exists.
We believe asking these questions can help reinforce a supplier diversity programme, which can help a business reach its sourcing goals.
Beyond this, a few more elements can make your supplier diversity programme stand out include:
- Are you giving supplier diversity awards to your buyers? Recognition tied to business outcomes will motivate employees and reward them for their hard work.
- Do you acknowledge diverse suppliers that have been innovative, and met their goals? This is an important step in maintaining a favourable relationship with your suppliers.
- Are you proactively recruiting diverse suppliers to connect with other diverse suppliers? Introducing diverse businesses to one another can help grow your multi-tier spend.
- Are the leaders in your organisation incentivised to promote your diverse supplier programme growth? Tying supplier diversity into larger goals throughout the organisation can help foster collaboration.
I believe supplier diversity is crucial to success. Building a successful programme requires careful analysis of your organisation’s current state and potential.
Daryl Hammett is the COO and co-owner of ConnXus, a SaaS-based global supplier management platform.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.