A successful supplier diversity program is one where the entire organization works toward meeting supplier diversity goals. A company-wide commitment to supplier diversity maximizes the benefits of an inclusive supply chain, including supply chain sustainability, gaining a competitive edge, accessing fresh new ideas, and improving your brand reputation.
Your procurement department has the most direct impact on developing a diverse supplier base, but aligning procurement and supplier diversity requires a strategic approach. Figuring out how to incorporate supplier diversity into buyers' sourcing efforts is a common challenge expressed in supplier.io’s 2021 State of Supplier Diversity Report.
Here are four ways to make it easy for your buyers to practice inclusive sourcing.
1. Make it a requirement to include diverse suppliers in sourcing efforts.
The No. 1 way to incorporate supplier diversity into your buyers' sourcing efforts is to make inclusion a requirement. If you require that at least one diverse supplier be included in each request for proposal (RFP), then you exponentially increase not just the effectiveness but also the awareness of your supplier diversity efforts.
Requiring the inclusion of at least one diverse supplier also demonstrates that your organization’s commitment to supplier diversity comes from the top. This is not a suggestion made by some advisory board; it is a mandate from leadership to prioritize diversity.
JetBlue recently formalized its supplier diversity efforts, setting a goal to grow its underrepresented business base by 5% year over year. To achieve that goal, the company requires at least one diverse supplier be included in every RFP.
“Inclusive sourcing begins with the RFP, which is why including at least one diverse supplier is a requirement for every RFP,” JetBlue’s Spiros Kallinikos said.
Don’t leave your buyers scrambling to meet this requirement. Provide support by making it easier for them to find and work with diverse suppliers and easier to track diverse spend.
2. Make it easy to find qualified diverse suppliers.
In order to include diverse suppliers in sourcing efforts, buyers have to be able to find qualified diverse suppliers. Seventy-five percent of respondents in supplier.io’s 2021 State of Supplier Diversity Report said finding diverse suppliers is somewhat to extremely challenging.
Make it easier for buyers to find qualified diverse suppliers with these activities and tools.
Host and attend networking and matchmaking events.
Personal connections go a long way in business partnerships, so make sure you are facilitating opportunities for potential suppliers and buyers to make those connections. Host events that bring qualified diverse suppliers in contact with buyers.
For example, each year Toyota hosts the Toyota Opportunity Exchange where certified diverse-owned businesses are invited to learn more about working with Toyota and to present their goods and services directly to buyers. The day-long conferences include a trade show, educational seminars, and networking.
Your event does not have to be as elaborate as Toyota’s. It could be as simple as hosting a meet-and-greet breakfast or even an afternoon coffee hour.
Diverse business councils and chambers of commerce frequently host networking events, educational workshops, and other opportunities to interact with diverse suppliers. Check the upcoming events calendar at your local affiliate(s) and commit to attending two or three events per quarter. Plan to bring at least one person from procurement to acquaint them with diverse suppliers and start developing connections.
Use resources such as Supplier Explorer.
Personal connections are crucial, but we still need data to help us find qualified diverse suppliers. Supplier Explorer by supplier.io aggregates data about diverse suppliers from more than 400 trusted global sources.
Robust search tools allow buyers to get specific about sourcing needs, and detailed supplier profiles save time in drilling down to the most likely candidates. Leveraging supplier.io proprietary algorithms, TrustIQ rates diverse suppliers between 1-5 on three characteristics: size, age, and experience.
Gain visibility with Market Analyzer.
It can be difficult to identify categories primed for diverse spending growth. Market Analyzer, an interactive tool from supplier.io, provides visibility into the breadth of diverse businesses in each of your spend areas and categories. With that information, you and your buyers can strategically plan and focus sourcing efforts to meet supplier diversity goals.
3. Make it easy to track diverse spend.
Establishing goals for your supplier diversity program is a basic requirement. The most common goal is increasing diverse spend, or the amount you spend with diverse suppliers. Tracking diverse spend requires careful record-keeping across departments. Some programs rely on spreadsheets, but that requires manual verification of diversity certification and limits the insights available from that data.
Make it easy to track this metric with supplier.io’s Tier 1 Spend Reporting and Unitier for Tier 2 Spend Reporting tools. Both tools simplify the aggregation of your supplier and spend data, comparing it to the industry’s largest database to ensure accuracy, and provide actionable reports with rich insight into your program. The Inclusion Tracker adds accountability across procurement departments, identifying projects that have not considered diverse suppliers and making it easier to include them.
Supplier diversity is key to business success, but your supplier diversity program will be a success only if your organization develops an inclusive supply chain. A requirement to include diverse suppliers in every RFP demonstrates leadership’s commitment to supplier diversity, and supporting that mandate with effective activities and tools makes it easy for buyers to include diverse suppliers in sourcing efforts.