The Drive to Increased Supplier Diversity

Studies show supplier diversity spend to rise in next two years


“There are a lot of groups that certify a minority or smaller organizations,” confirmed Greg Thomas, Vice President, Procurement Advisory, BravoSolution. “There’s The National Gay & Lesbian Chamber of Commerce, the Hispanic Chamber of Commerce, there are veteran-owned and Native American groups—you’ve got all these other groups besides NMSDC and WBENC. As a corporation, you have to define how broad your supplier diversity program is going to be—it could be all of these groups or it could be a subset of them. Underneath that strategy, there’s a pool of opportunity where you can pull up suppliers from any of those groups. And it’s very important that your supplier diversity teams are reaching out to all those groups within your pool to find the suppliers and the opportunities that make up that pool.”

Almost always included in the focus of a supplier diversity program are Minority-Owned (according to 94.2 percent of ISM survey respondents) and Woman-Owned (according to 93.7 percent of ISM survey respondents).

Non-profit WEConnect International is one such organization working to help find women in business, get them certified, develop their capacity and introduce them to actual contract opportunities to compete for corporate business. Started in the United Kingdom, WeConnect is now located as a resource throughout other parts of Europe, Canada, India, China and Peru—and is currently working to extend their services throughout other parts of Latin America and Australia.

“Historically, women and businesses outside of the U.S. haven’t been thinking big enough,” explained Vazquez. “On the demand side, they haven’t really thought about how to find more innovative, diverse suppliers that see the development of products and services a bit differently and know how to meet future demands of a changing, global economy. Women are well-positioned to provide those kinds of solutions but if they are missing as vendors to these corporate value chains, then those companies are not going to be as competitive as they could be.”

In fact, the number of women influencing the workplace, as both employees and business owners, is set to increase drastically in 2012 according to new book “Society 3.0: How Technology Is Reshaping Education, Work and Society,” by Tracey Wilen-Daugenti, PhD. What’s more, women control the majority of purchasing decisions in a household—and their influence is growing, according to Nielsen’s “Women of Tomorrow” study.

“It’s critical that women-owned businesses all over the world understand that the world really does need the products and services that they are either developing or even just thinking about,” said Vazquez. “Because women are directly involved in most countries in finding such resources as water and fuel and feeding, educating and clothing the community—they see what’s missing. We need to make it easier for them to want to develop those ideas into actual products and services. And the ones that are already doing it—we need to help them be better positioned for larger contracts—not just local contracts but regional and global—that will make it possible for them to do more in their communities.”

Open your door to stronger connections

While a small amount of focus is on locally-owned business (23.3 percent), 62.8 percent of ISM survey respondents’ supplier diversity programs do focus on small business to drive growth. Additionally so, 67 percent confirmed their membership to the National Minority Supplier Development Council (NMSDC). And while the challenge of finding diverse suppliers remains, organizations need to open the communication gateways to grow business for both parties involved.

“It’s important that we recognize that there are strong and qualified suppliers out there who can supply us goods and services,” said Thomas. “And while many of them are smaller, they are very competent and in most cases, those smaller businesses are the diverse businesses. Those supplier diversity programs help identify who they are and really open up some doors for those suppliers—and additionally open some pretty unique doors for corporations as well.”

Whether you have established connections with supplier diversity groups for decades or are just looking to strengthen those relationships and grow your network, businesses need to connect supplier diversity programs to business growth, instead of just adhering to a mandate. The supplier diversity has to be a part of a business’s overall culture to be successful.

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