Supplier diversity and inclusion programmes matter more than ever

Supplier diversity and inclusion programmes matter more than ever

By PL Staff

By PL Staff

11 March 2021

Business leaders are publicly committing to making inclusive and sustainable growth a priority - and that includes the supply chain.

Although corporates have been running Supplier Diversity and Inclusion (SD&I) programmes for years, the recent spotlight on racial injustice and equality has pushed it up the agenda.

How can procurement help?

Procurement practices should aim to improve the communities that businesses are serving and source from diverse suppliers. It’s a regulatory requirement to do so in many countries, but it’s also an opportunity to gain access to new and innovative suppliers and ideas while having a positive social impact.

We’ve thrown the spotlight onto 3 businesses who are updating their programmes and asked them how they’re gearing up for success.

1. Intel

In 2019, Intel surpassed its 2020 target of spending $1bn with diverse suppliers. Now it wants to build on this achievement, and the procurement team has identified the most efficient ways to do so:

  • Commitment: Setting a target of spending $2bn annually with diverse suppliers by 2030.
  • Education: Practicing diverse supplier development by leading workshops on brand development, cybersecurity, legal compliance and other relevant topics.
  • Collaboration: Co-ordinating with third party SD&I organisations; every buyer must include at least one diverse supplier in each Request for Proposal and Intel also asks its tier 1 suppliers to spend 10% of their Intel-derived revenue with diverse suppliers.

2. Unilever North America

The Anglo-Dutch FMCG company’s North America division has ambitious goals to boost diversity in its extended supply chain, and has put measures in place to reach them:

  • Commitment: Aims to boost spend with diverse suppliers at Tier-1 up to 10-12% of the total so that they reach best in class status by 2024.
  • Education: Engaging with non-diverse suppliers to help them become more inclusive.
  • Collaboration: Working with suppliers to help improve their existing social impact programmes, showcasing diverse suppliers at events and allocating a set portion of supplier financing funds for diverse suppliers.

3. Financial services company

The financial services company has had a supplier diversity program in place in North America since the 1970s and plans to expand it in these areas:

  • Commitment: Setting several long-term goals, including; building gender equality, reducing poverty, promoting economic progress and tying the success of the program to the CPO’s overall performance targets.
  • Education: Running workshops to teach diverse suppliers on its tendering processes and offering support for developing leadership skills and sustainability activities within their own organisations.
  • Collaboration: As well as taking diversity into account when making buying decisions it also has external elements, including working with third parties to identify potential suppliers and offering financial support to women-owned businesses

Many companies are still at a very early stage in adopting a formal approach to supplier diversity, if at all. These examples show that by creating a formal programme, better SD&I results can be delivered as initiatives are monitored closely and measured against specific targets.

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