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Supplier Diversity Blog by supplier.io

Identifying Proven Diverse Businesses to Build a High-Impact Tier 1 Program

There are two broad ways to identify opportunities for proven diverse suppliers in your Tier 1 supplier base:

Option 1: Align to Upcoming Sourcing Initiatives

The first approach is fairly straightforward – work with your procurement team to get visibility into when sourcing opportunities are arising. Here it is helpful to be thoughtful about selecting categories that may benefit from the unique benefits that small and diverse companies can bring to the table. Your next step is to identify qualified suppliers to meet those category needs in advance of upcoming sourcing events.

Option 2: Strategic Opportunity Analysis

The second approach is to conduct a Strategic Opportunity Analysis. This can seem complex at first but there are just a few steps. First, you need to identify the category (or NAICS code) for each supplier your company is currently doing business with. To do this you will need to run your supplier file through the 3rd party data enrichment process.

Second, for each category or NAICS code, calculate the percentage of your current spend with diverse businesses. Once you have these percentages, work with WBENC, NMSDC, NGLCC and other certification agencies to see the availability of diverse suppliers in the NAICS codes utilized by your company. Your goal is to identify categories that have: (1) low utilization of diverse suppliers by your company and (2) a high concentration of diverse suppliers per the certification agencies. Your next step is to identify qualified suppliers and then work with specific category managers to build a strategic plan to include diverse suppliers in the category plan.

Finding Proven Suppliers

Regardless of the approach you take it is critical that you bring a group of highly qualified diverse firms to the table or your procurement team will view your efforts as counter-productive to their sourcing objectives and resist supporting you.

You can take advantage of a large and accurate database of diverse suppliers that contains detailed supplier information. This database should allow searching for suppliers through an internet portal using any parameter. It should help your internal teams to find diverse businesses by making it easy to locate proven MBE, WBE, LGBT, SDB, 8(a), HUBZone, veteran (VOSB), service-disabled veteran (SDVOSB) and small-business suppliers from one location.

Supplementing basic supplier details with insight on whether suppliers have been utilized by one or more of a large group of Fortune 1000 companies is helpful to reducing the due diligence required to determine if the firm has the capacity to meet your needs and be included in an RFP.

Screening for Unique Requirements

Third party databases provide important details, but often you need more information to make an informed recommendation to your team. If your portal database contains supplier email addresses you can “invite” those suppliers to register in your portal. As part of your registration process, you can require the suppliers to complete surveys to determine if their capabilities meet your unique requirements.

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The team has a long history in driving innovative solutions in supplier diversity. We believe that companies deserve solutions that are effective and provide measurable value and results. Started more than a decade ago, supplier.io has rapidly become a prominent provider of supplier diversity solutions to leading corporations. We currently support customers in automotive, healthcare, insurance, retail, manufacturing, education, and banking. One in five Fortune 50 company relies on supplier.io.