Business

Here’s How to Build Your Company’s Supplier Diversity Program

The COVID-19 pandemic has taught many companies firsthand how vital it is to have options when it comes to suppliers. Promoting supplier diversity in your supply chain can encourage diversity among your suppliers, broadens the pool of available suppliers, lowers costs, and increases the quality of raw materials and supplies. Supplier diversity can make your supply chain more agile and resilient, and prepare your company to weather shortages and economic downturns as well as to bring new products to market.

But how can you build a company supplier diversity program? Supplier diversity isn’t about having a wide range of suppliers, but about choosing suppliers who prioritize diversity in their places of business. You’re looking for suppliers that are women- or minority-owned, or that hire people with disabilities, for example. To start your own supplier diversity program, begin by setting goals for the program, then you can move into seeking out diverse suppliers to meet your sourcing needs.

Set Targets

It would be weird if every supplier diversity program were the same, wouldn’t it? You need to put together a corporate policy for supplier diversity and set targets for what kind of diversity you’re looking for in your supply chain. Maybe you want to work with more women-owned businesses, or you’re looking for more LGBT representation among your suppliers. Identify these goals, and put together a corporate supplier diversity policy that defines the groups you want to bring into your supply chain.

In order for a supplier diversity program to work, you’re going to need complete commitment and support from your organizational leadership. Establish how much you want to spend on diverse suppliers. Develop a plan for moving the supplier diversity program forward. You need to articulate how diverse suppliers will fit into the overall mission of your organization, how they’ll be monitored and developed, and how searching for diverse suppliers will fit into your overall sourcing process.

Train Suppliers to Meet Your Needs

It’s not hard to find diverse suppliers. Organizations like the Women’s Business Enterprise National Council, the U.S. Hispanic Chamber of Commerce, and the National Minority Supplier Development Council can help you find diverse suppliers to meet your business needs. But diverse suppliers, just like non-diverse suppliers, need some guidance as to how they can best meet your expectations. Put together a supplier diversity training program that teaches suppliers how to win your contracts. Not only can such a program help diverse suppliers prepare themselves to meet your contract obligations, but it can also help you access diverse suppliers before anyone else – which increases innovation.

Encourage Supply Chain Transparency

Supply chain diversity gives diverse suppliers the information they need to know how to interact with your organization, and can take down some of the obstacles that keep diverse suppliers from building relationships with your company. For example, companies like Shell Oil have put together resource guides that help small business owners understand how to work with a massive corporation. If you want to work with small suppliers, they’ll better understand what products and services they can bring to the table if you’re transparent about those needs.

Enhancing transparency in your supply chain can also help you boost supplier diversity in an unexpected way – by revealing the diverse suppliers you’re already working with. Get a deeper understanding of the current level of diversity in your supply chain by identifying your existing diverse suppliers and the level of spend you have with each of them.

Build Diversity into Onboarding

You can and should seek out diverse suppliers, but you might also be surprised at how many suppliers already fit into one diversity category or another. When you’re onboarding new suppliers, make sure they self-identify their diversity categories – and what diversity certifications they’ve already earned. You can compare this information to your desired diversity classifications and certifications. You want to collect as much data as you can about diversity in your supply chain so you can better evaluate the success of your supplier diversity program.

Increasing diversity among your suppliers is a great way to build resilience into your supply chain and gain access to new and innovative products, outlooks, and ideas. There are plenty of diverse suppliers out there waiting to do business with a company like yours – and while they might need some guidance to understand your needs, you stand to benefit greatly from your relationships with diverse suppliers. Take a lesson from the COVID-19 pandemic – strengthen your supply chain against economic downturns and shortages with a supplier diversity program.

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