Companies that operate vibrant and successful supplier diversity programs have something in common: they constantly are beating the bushes to find qualified diverse suppliers.
As trends over recent years have shown, supplier diversity is a business imperative, not a social experiment. So they beat the bushes to find eager yet qualified diverse suppliers who can contribute to the corporate bottom line. They also look toward the future by working with diverse suppliers to develop their businesses to ensure a pipeline of diversity business partners is always stocked.
Here are five steps companies with successful supplier diversity programs utilize to increase their roster of diverse suppliers:
1. Requesting your prime suppliers to report their diverse spend
A common path to expand and augment your supplier diversity program impact and spend is to recruit your large and strategic prime suppliers to report on who their diverse suppliers are and what they are spending with them. This is commonly referred to as Tier 2 reporting.
Increasingly, corporations are recognizing that second-tier spend is vital to measuring the impact of their supplier diversity programs. While many diverse suppliers do not yet have the capacity to service a Fortune 500 supply-chain contract on their own, they certainly can contribute goods and services under a second tier agreement. This is also an ideal method to develop diverse suppliers with the intention of moving them into a Tier 1 relationship in the future. When considering implementing a second tier strategy it is essential to set clear expectations for your prime contractors and establish goals for inclusion and spend to second-tier diverse suppliers in their contracts.
2. Partner with Certifying Organizations
Organizations that promote and certify diverse suppliers, such as the National Veteran Business Development Council (NVBDC), National Minority Supplier Development Council (NMSDC), Women’s Business Enterprise National Council (WBENC), U.S. Pan Asian American Chamber of Commerce, National Gay and Lesbian Chamber of Commerce (NGLCC) and United States Hispanic Chamber of Commerce, along with other similar organizations, can be a great resource in identifying potential suppliers. In fact, these organizations are often on the front lines as diverse suppliers flock to them for information, technical assistance and certification. In addition, these organizations stage national and regional events that attract diverse suppliers and many operate partner regional councils around the country. For instance, the NMSDC’s regional Michigan Minority Supplier Development Council holds its own Annual Procurement Conference, which is an important source of diverse suppliers in the automotive industry. WBENC, meantime, maintains a network of 14 Regional Partner Organizations that provide services to women-owned businesses.
These organizations are also important because they offer, both on the national and regional level, sponsorship opportunities where you can market your program, matchmaking events to meet with potential new suppliers, and industry trend workshops and speakers allowing you to stay on top of the world of supplier diversity.
3. Stage Your Own Diverse Supplier Events
Supplier fairs, matchmaking programs, opportunity exchanges and similar events can provide a sure-fire opportunity to attract diverse suppliers to your company. Fortune-sized corporations, whether it is a Wal-Mart, AT&T or CVS Health, regularly hold such national and regional events in order to introduce supplier diversity initiatives to new suppliers. While the very large companies are supporting billions of dollars in annual diversity spend, you don’t have to be a behemoth to get in on the act. Local and regional events in your operating areas can work just as well in identifying diverse suppliers who can meet your business needs.
4. Develop Your Own Supplier Base
One strategy for companies seeking to grow their numbers of diverse suppliers is to take the initiative and develop your own. Often times with diverse suppliers, they may lack certain business intangibles, whether that is business acumen, capital formation or equipment. Once you’ve identified a diverse supplier with an upside, a little nudging and nurturing can help get that supplier to a level where they can contribute actively to your supply chain for years to come. In taking them under your wing, you can do something as simple as bringing them periodically into your organization to work directly with your procurement, business and marketing experts or perhaps fund their attendance at executive management programs at many university business schools around the country where they can receive additional exposure to business essentials such as succession planning, financial control and growth strategies.
5. Understand the Supplier Needs within Your Company
While seeking out diverse suppliers is largely an external exercise, it is vital for the supplier diversity professionals in your company to fully understand the needs of the company and ensure that those needs are communicated throughout the organization. To ensure success, the commitment to supplier diversity must permeate throughout the organization. Take the time to educate your internal business partners about supplier diversity as a means for meeting their business needs via diverse suppliers. While on paper it may seem that suppliers are more easily found in traditional procurement supply areas, such as manufacturing, distribution and food services, surely your specialized areas such as legal and governance, human resources and advertising and marketing should not be excluded in the search for diverse suppliers.