A Supplier Diversity program is a proactive business program which encourages the use of minority-owned, women owned, veteran owned, LGBT-owned, service-disabled veteran owned, historically underutilized business, and Small Business Administration (SBA)-defined small business concerns as suppliers.
Supplier diversity compliance is no longer just a federal and/or state government requirement. It has become an expectation across almost all industries, and a lack of a strong Supplier Diversity program will be the culprit for missed sales/opportunities and goals; not to mention the benefits you are missing out on by not having diverse suppliers.
A Supplier diversity commitment benefits a company because it:
Promotes innovation through the entrance of new products, services, and solutions
Provides multiple channels from which to procure goods and services
Drives competition (on price and service levels) between the company's existing and potential vendors
Showcases the company’s interest in and commitment to the economic growth of all communities
So, let's say you've run into one or more of the problems listed below:
Problem #1 - Your company has or would like to set supplier diversity goals that you must meet
Problem #2 - Your client/customer has given you supplier diversity requirements and you don't know how you'll meet them
Problem #3 - You want to have an impact on your community
Any of these strike a nerve? Here’s what we recommend:
Solution #1 – Build a sustainable and scalable program and set internal goals for your organization, then figure out your spend baseline. This will give you the opportunity to see where you are already spending with diverse suppliers and identify areas for improvement. Be sure to build your program in a way that whatever goals you set are attainable.
Solution #2 - Develop a policy and procedure. This will ensure that everyone in the organization is on the same page when it comes to the program’s organization and function. Then use either government bodies like the SBA or diverse councils like NMSDC to identify and qualify diverse suppliers. Once you’ve found your suppliers, create a process for reporting spend to the customer so that you remain in compliance.
Solution #3 - Create a program that showcases your company’s interest in and commitment to the economic growth of all communities. This means attending industry events with a focus on diverse suppliers. Intentionally include diverse suppliers within your supply chain that truly own their businesses and are not just as a pass through. Also take the time to develop your diverse suppliers and help them scale their business.
Supplier Diversity should be an important function within your purchasing organization. If you’re struggling with building a foundation, Inclusect is available to help. We take pride in our work and want to give you the time and guidance your organization needs. Inclusect can provide the groundwork that you need in developing and incorporating an effective supplier diversity program within your organization. Our process is designed to create sustainable programs and empower your team to reach business goals.
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