Increasing Business Opportunities Through Supplier Diversity

A corporate awakening has brought diversity, equity and inclusion (DE&I) to the forefront, increasing visibility and funding for supplier diversity. But funding alone is not enough to drive sustainable and impactful change. It takes a higher level of understanding and commitment; corporations need to know how inclusion supports their bottom-line results.

Diverse suppliers — businesses that are 51-percent owned and operated by leaders who are diverse — can offer new perspectives, different approaches and customization. Such qualities are in high demand, especially as businesses move from producing one-size-fits-all homogenous solutions to becoming more customer-centric, where the human experience is a key differentiation. To provide customization — as in on-demand individualized innovative products — companies need a flexible and creative supplier. These are the attributes many diverse suppliers can provide.

While diverse suppliers may be better suited for accommodating niche business requirements, they may not be the best fit for every commodity. Some products offer a space where diverse suppliers can compete; others do not.

Still, there can be opportunities for all companies to include diverse suppliers that benefit not only the business but also suppliers. Correcting the imbalance between established corporations and diverse suppliers increases economic opportunities within these diverse communities and supports the corporation’s bottom line.

Begin by analyzing your supply chain to learn which of your current suppliers are diverse. You might be surprised to find you are already doing business with diverse suppliers. By learning their success stories, you can create an understanding of how these diverse suppliers have supported your business in the past. Sharing these stories creates a new appreciation and understanding of diverse suppliers. Then, proceed to strategically grow their presence where it makes sense.

Creating a supplier diversity strategy introduces change. It can upset established supplier selection practices. Move slowly, preserving existing relationships while maintaining the support of your business partners. Begin by finding opportunities to improve — such as occasions where suppliers are not satisfying business requirements, where pricing is high, or where the competition is encroaching on your market share, necessitating innovative solutions. By addressing internal pain points, you introduce the value of diversity.

Grow your program slowly and steadily. Understand where supplier diversity supports business drives goals, profitability and long-term performance. Be patient. The benefits of supplier diversity are not immediate. It may take time to realize improvement.

Trust your process and selection criteria to identify high-performing diverse suppliers, then use them to infuse innovation and creativity. Let them do what they do best — solving business problems by applying new approaches, because this is their expertise.

(Image credit: Getty Images/Klaus Vedfelt)