5 Easy Steps to Set Up Your Supplier Diversity Program
Supplier diversity and inclusion are hot topics today. This has never been truer for business procurement.
More companies are stepping up their game with procurement strategies that encourage partnering with minority-owned businesses, women-owned business enterprises, veteran-owned businesses, and LGBTQ+-owned businesses. And for good reason. Embracing new, diverse suppliers as business partners brings both commercial and social benefits. With supplier diversity programs comes stronger thinking and economic development. Supplier diversity is also a smart business strategy that ensures a diverse supply chain when it comes to procuring goods or services for any government or private organization.
According to Harvard, 20 out of 24 clients have some level of focus on supplier diversity. Take UPS, for example. The company currently spends $2.6 billion annually doing business with roughly 6,000 small businesses and diverse suppliers—and plans to bump up that number year over year.¹
Why Your Company Needs a Supplier Diversity Program
Not only does it promote the desire for a more equitable world, but supplier diversity encourages the growth of traditionally under-represented businesses. This helps create jobs and tax revenue in local economies and communities. Beyond that, an inclusive supply chain expands the pool of potential suppliers and promotes innovation by introducing new products and ideas.
Potential Roadblocks to Supplier Diversity for Procurement Teams
Maybe you want to do your part and increase your spend with more diverse supplier categories and businesses. But it can be difficult to know where to begin. You have to be able to find the right suppliers for your business. And when you do, you need to be able to quickly connect. All this takes time and you’re on tight deadlines. But with the right partner, setting up a successful supplier diversity program is a lot easier than you might think. Consider these five simple steps to help you get started with your own diversity initiatives:
How to Build a Successful Supplier Diversity Program
Step 1 – Determine your goals. First decide your goals. Want to quickly find diverse suppliers that match your criteria? You need access to quality data that pinpoints diverse businesses, certified diverse suppliers, and other self-reported information. Or maybe your procurement team wants to track and report on diverse suppliers that you already work with. You still need to be able to quickly access that data in your procurement processes.
All this is very easy to do in the Graphite Connect platform. We collect and manage an expansive list of qualified diverse suppliers. During the on-boarding process, supplier diversity status is established and information is continuously updated over time. Baseline reporting is a snap—you can easily see the economic impact of your supplier diversity spend.
Step 2 – Infuse diversity into your company culture. Creating an inclusive workplace culture that promotes supplier diversity within your supply chain starts from the top down. Your company’s executive team must desire to build a diverse culture and hire employees who are open to working with people of different nationalities, skin colors, genders and sexual orientations.
As a purchasing leader, it’s important for you to make sure that you have executive sponsorship for what you’re trying to accomplish. Decision makers need to believe it’s their job to do good and be inclusive in their diversity spending. All employees who are purchasing services or products need to be able to easily find diverse suppliers. Once your company’s leadership sets the tone for diverse spend, it’s easy to extend that inclusive outlook throughout your organization.
Step 3 – Build awareness through communication. You have to invest in this cultural change to get employees to buy into it. Supplier diversity efforts should allow for cross-team collaboration, with management in charge of educating employees about how increasing supplier diversity programs play an important role in making this shift. Distribute information about your diverse supplier initiative throughout the organization. For example, consider creating an internal marketing campaign that highlights the importance and benefits of effective supplier diversity programs.
Step 4 – Choose one or two spend categories to focus on. When it comes to finding diverse suppliers, decide on a couple of spend categories that will make an immediate impact. For instance, maybe you want to start with marketing or financial partners. The Graphite Connect platform allows you to filter and search for the best diverse suppliers and diverse companies based on your unique criteria, whether you’re looking for minority groups, service disabled veteran- or woman-owned business enterprises. Or you can quickly create an “Opportunity” for diverse suppliers to find and apply to work with you.
Step 5 – Identify and make the most of your wins. Analyze and identify what has worked and then continue growing your supplier diversity program from there. As your efforts start to gain traction, build success stories around these experiences. You can post and share these stories through the Graphite network to show the value your partnerships with diverse suppliers bring to the business.
Unlock More Business Opportunities with Graphite Connect
Relying on manual processes to match buyers with suppliers is an inefficient method of the past. That’s why Graphite Connect has created a two-sided network that simplifies the way buyers and suppliers connect and transact with each other.
Creating an Inclusive Procurement Playing Field
The Graphite Connect platform provides an open and equal playing field that offers minority-owned business enterprises, women-owned business enterprises, and other diverse-owned businesses an opportunity to win the business. It allows large companies to build their cultures around inclusion and empowers diverse suppliers and minority-owned businesses to “up” their game by joining an expansive network.
Building a Broader Community Network
Businesses can openly post what they’re looking for to an entire online community. For example, buyers can open a search and let diverse-owned companies and other minority groups and organizations within the network know they promote supplier diversity. Suppliers can browse and apply for those business opportunities that fit their strengths and capabilities.
Driving Deeper Transparency into Your Diversity Spend
This centralized, all-under-one-roof procurement tool offers you greater visibility and control over your diverse supplier spend. We take care of supplier vetting with a painless onboarding process that simplifies data collection and makes overseeing suppliers and supply chains easier for you. Supplier diversity and inclusive procurement opens the door to new perspectives and ideas. As a result, your business will benefit from a higher level of innovation and creative problem-solving. “These diverse businesses will bring in new technology and ways of thinking that you didn’t even know was available,” said Smith.
Ready to Learn More?
When you’re ready, Graphite Connect can help you set up your own global supplier diversity and inclusion program and simplify your entire procurement process.Request a Demo
References:¹ Harvard Business Review. “Why You Need a Supplier-Diversity Program.” August 17, 2020.