Some of the largest companies across the globe today are embracing supplier diversity. Supplier diversity is a proactive program encouraging businesses to source supplies from minority-owned, women-owned, veteran-owned LGBT-owned, service-disabled veteran-owned, and SBA-defined small business vendors. It not only provides multiple channels to source but also creates a distinct competitive advantage for businesses. However, setting up or managing supplier diversity can be daunting. Consider the following supplier diversity best practices to attract diverse suppliers that can add value to your supply chain.

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Supplier Diversity Best Practices

Supplier diversity best practices #1: Secure buy-in from the C-suite  

Often organizations’ C-suite find it difficult to articulate the value of supplier diversity. They are responsible for an array of activities to keep the business running, making it difficult to focus on this. CPOs must ensure that the organization’s leaders are regularly being updated on the successes of supplier diversity initiatives so that it becomes easier for them to authoritatively discuss it through the organization. Especially, showcasing the financial benefits of the supplier diversity to C-suite for success and stature.

Supplier diversity best practices #2: Set quantifiable goals 

Articulating the effectiveness of supplier diversity initiatives is the next crucial step for businesses. However, tracking and measuring supplier diversity can be painstaking. Companies must update profiles of diverse supply base and set actuals targets for performance. They should also consider evaluating the company’s performance against the set goals on a monthly or quarterly basis.

Supplier diversity best practices #3: Collaborate with proven diverse suppliers 

Once the goals have been established, companies must identify opportunities to add diverse suppliers to the supply chain. Gain visibility into contracts that are expiring and find new sourcing opportunities. In the next step, identify qualified suppliers that can be included in the RFP process. The Minority Business Development Agency (MBDA), the Women’s Business Enterprise National Council (WBENC), the U.S. Small Business Administration (SBA) could be a great place for companies to start with. Then market that you have a registration portal for diverse suppliers and link that portal to the procurement section of the website.

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Supplier diversity best practices #4: Create central repository

Build a supplier database comprising of all suppliers. Gain details such as size, employees, price quotes, contract values, revenues, environmental certifications and of course, diversity status and keep the database updated. Creating a central repository will allow you to compare prices and offerings side by side, understand which suppliers are producing more value, and identify segments that could use more diverse suppliers.

Supplier diversity best practices #5: Challenge your competitors 

After the diversity goals have been met and new suppliers have come onboard, take this initiative to the next level. Encourage contractors to implement supplier diversity programs and publicize the initiatives taken. Put out press releases and apply for awards given to companies initiating supplier diversity programs. Also, challenge your competitors to build a mutually beneficial, multi-cultural world like you.