Supplier Inclusion Is a Valuable Piece of Diversity Programs

August 23, 2022
By Suzanne Weston

An organization uses its mission, vision and values to demonstrate what matters to it. Messaging is carefully crafted and designed to make the organization attractive to consumers, investors and employees. Now more than ever, inclusion is a necessary pillar in that messaging and is called out as a reason for operating.

Inclusion efforts often focus on the workplace — as this is relatable and highly visible. Companies message the value of inclusion, focusing on diversity of thought and the ability to generate innovation and reduce risk. Still, measuring the business value of inclusion is not easy.

Supplier inclusion is another important piece of the inclusion paradigm — but its value can be overlooked.  

How to Diversify Your Supply Chain

Organizations typically have centralized or decentralized procurement. No matter the process, the eternal challenge is finding qualified, contract-ready diverse suppliers to consider for a specific purchase. Finding them takes time and patience as well as relationship-building.

While it might be convenient and far easier to renew a contract with incumbent suppliers because they already know your business, it is wise — and advantageous — to consider other suppliers and understand what they have to offer. Competitive bids make suppliers pay attention and fight to keep your business.

During the bid process, you learn what other options are available. Without looking at a slate of candidates, how do you know? Even in a decentralized environment, there are advantages to looking for competing bids and comparing quality, price, and performance.

Finding Diverse Suppliers

Just as you diversify your workforce by considering a diverse slate of candidates, use your supplier diversity team to provide a pipeline of qualified diverse suppliers in advance of purchases.

This is where timing and business requirements are important. Gathering more information about what the business is looking for improves the quality and viability of the list of diverse suppliers. Expertise helps: Supplier diversity professionals have industry connections who can recommend suitable diverse suppliers.

Although you may end up renewing with the incumbent, you are making that decision based on facts and not simply for convenience. And you are giving diverse suppliers an opportunity to show what they can do and the value they can bring.

The Business Value

Always select the best supplier for any contract — and know what makes it the best. Does the company deliver a specialized solution, higher quality or better value?

Document the value you expect the supplier to provide. If it is a diverse supplier, share that with your supplier diversity manager. Remember, the most difficult thing for supplier diversity managers is measuring the business value. This is because they are involved in the beginning of the process, helping identify diverse suppliers for bids — and often, their engagement ends there. As such, measuring the business value any supplier brings is often lost, forgotten after the contract is signed. 

A supplier diversity program should have its own meeting cadence. This involves holding quarterly business reviews with category managers or business owners to discuss upcoming bids, expiring contracts and the performance of current diverse suppliers. During these sessions, the supplier diversity manager ensures that diverse suppliers are performing as expected and delivering value. Use these meetings to collaborate in setting expectations, establishing targets and partnering to increase opportunities to engage with diverse suppliers.

The magic is not just from selecting diverse suppliers. It is from diversifying as well as challenging your incumbents to improve and remain competitive while actively managing internal relationships. Supplier inclusion requires diligence and oversight — and collaboration across the organization. 

Make your inclusive supply chain results based, not a numbers game. Measure what matters — and results will follow.

(Image creidt: Getty Images/Malte Mueller)

About the Author

Suzanne Weston

About the Author

Suzanne Weston is a former partner, program strategies at IW Consulting Group, specializing in supplier diversity program creation, innovation and management. She is passionate about building impactful second-tier programs.