One of the best ways to level the playing field in your industry is by implementing a supplier diversity program.
This article will discuss how to implement a supplier diversity program and what benefits it has for both organizations and suppliers.
In this article, we will discuss:
– What is a supplier diversity program?
– How to implement a supplier diversity program?
– The benefits and risks of implementing such programs.
– Examples of some successful supplier diversity programs.
– Challenges faced by the implementation of an effective supplier diversity program.
A company’s supply chain includes suppliers that they use for goods or services required to operate their business at its highest possible level.
One way the industry can be leveled out is through the inclusion of diverse suppliers into these contracts with companies.
This creates more opportunities for smaller businesses who are often left out due to lack of capitalization and connections with larger organizations that might discriminate for various reasons.
– More competitive supplier market
– Reduced risk for companies in the supply chain to be manipulated by suppliers who may act as “middlemen” in transactions and charge unfair prices.
– An increased opportunity for smaller organizations that historically have been left out due to lack of capitalization or because they are at some level not considered “diverse.”
This might include women, people with disabilities, veterans, minority groups, etc., which will ultimately make up better representation both on company boards and within leadership positions.
There are many challenges ahead when implementing a supplier diversity program; mainly is securing support from all levels of the organization.
– Culture shift from a focus on cost to one that also considers diversity and supplier management as critical factors in long-term success.
– Lack of leadership support, which will often be hesitant to commit time or funds needed for new programs if they do not see how it benefits them personally (i.e., increased responsibility).
Successful Examples: The world’s largest retailer Walmart has been implementing Supplier Diversity Programs since 1991, with suppliers encouraged through financial incentives such as grants and low-interest loans to enter into partnerships with women-owned companies and minority businesses.
These diverse suppliers are given priority when supplying products across array of industries including apparel, consumer electronics, home goods, etc.; totaling over $200 billion worth of revenue annually.
Unexpected benefits such as the supplier diversity program leading to innovation and increased competitiveness of the company’s product offerings, or improved customer care by a diverse workforce which takes into account different cultural preferences.
In other cases, there may be no direct financial incentive but an increase in employee morale through implementing programs that lead to greater equality among employees: “The desired outcome for any business is happy employees who feel they are treated fairly.
Key Takeaways: Supplier Diversity Programs come with both positive and negative outcomes depending on how it is implemented; however, research has shown long-term success rates at 97%.
Through leadership support from key decision-makers within firms and proactive action by management to create a sustainable supply chain, implementing this type of program can lead to a healthier, more productive workforce and greater equality among employees.
Supplier diversity programs should begin with an assessment of the company’s current organization structure and supply chain to best identify potential gaps that need addressing.
Core elements for supplier diversity program success include leadership support from key decision-makers within firms and proactive action by management to create a sustainable supply chain.
This is not about guilt-tripping suppliers into bidding on contracts; this is about making sure your procurement process supports all parts of our society because we are stronger together as one people than apart.
Benefits can range from increased employee morale through implementing programs that lead to greater equality among employees and suppliers.