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Supplier Diversity Blog by supplier.io

Think Like Your Customers: Why Supplier Diversity Works

why-supplier-diversity-worksConsultant Terry Soto, who is CEO of About Marketing Solutions Inc.-- a Burbank, Calif. firm that optimizes corporate strategies to include today’s diverse U.S. market-- recently wrote recently on the Huffington Post that as the face of the country continues to be transformed, U.S. corporations are undergoing important organizational alignments to ensure their companies and brands become more diverse and relevant into the future.

Soto wrote that companies that see diversity as a winning growth strategy are following several key approaches to ensure success, including C-Suite leadership commitment; aligning the organizational vision and core values with a culture of diversity; establishing business goals for human resources and diversity management leaders in the organization; and monitoring, measuring and tracking goals.

Supplier diversity is a big part of what corporations are trying to accomplish in this new diverse environment. Corporations recognize that it is good for business to have a robust supplier diversity program, which in turn creates economic opportunities for the communities in which these businesses operate. Put simply, diverse businesses predominantly hire diverse people.

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The National Minority Supplier Development Council (NMSDC), in partnership with The Institute for Thought Diversity (ITD), found in a study that its nearly 12,000 certified minority-owned businesses produce more than $400 billion dollars in annual revenue, while actively employing more than 2.2 million people and contributing about $49 billion in local, state and federal tax revenues.

The NMSDC report described what it called a “multiplier effect” regarding economic opportunity derived from supplier diversity and minority business enterprises (MBE). It bases this on sales, employment and industry information extracted from data of NMSDC certified minority-owned firms, reflecting increased economic activity that comes from sales being generated and expenses incurred by these firms.

The report outlined how the multiplier effect contributes to economic activity in minority communities: “When an NMSDC MBE generates sales, it must use a portion of that money to purchase other goods and other services as well as hire people to meet the demand for its products and services. Purchases made by the NMSDC MBE are representative of sales to other firms who must then also purchase goods and services and hire people to meet their new demand derived from the MBE community.”

Engaging Diverse Businesses is Good for Business

The report goes on to say, “The additional hiring to meet this increased demand means that more people have income which they will use to purchase goods and services for their households and families. All of this brings added sales to businesses in the community. The net effect is that NMSDC MBE sales dollars are being recycled in the community through this process of sales once again requiring additional purchases and increased employment, which result in sales for other businesses who must use that money to make their own purchases and hire additional people.”

These diverse firms predominantly hire diverse people who, in turn, have more income to buy goods and services. And as the sales of MBEs are growing at a rate of 34% per year (nearly double the national average), these diverse organizations will be a major economic driver throughout the 21st century. Simply put, not only is engaging diverse businesses good for business, but it’s necessary for success.


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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.