Diversity in the supply chain is an increasingly important topic for a variety of players within large buyers, as well as consultants and advisors and professional organizations and associations.
If you’re hesitating about taking the steps necessary to create a more diverse supply chain, you may wish to take a look at examples of other businesses that have done so successfully. Indeed, a growing number of companies are enjoying a variety of benefits thanks to this approach.
Case Studies
One of the most prominent examples is none other than Coca-Cola. Having initially set a goal of empowering 5 million female entrepreneurs by 2020, they surpassed this and reached 6 million women in 100 countries through their 5by20® initiative, which provides skills training, financial services, mentoring and other resources. Internally, they also established a Global Women’s Leadership Council in 2008 to push for women in global leadership positions. Another measure that they have taken is increasing their expenditures on Black-owned businesses in light of economic difficulties exacerbated by ongoing racial injustices.
Among the benefits for Coca-Cola are an increased quality of products and services alongside decreased costs. Having a more diverse pool of suppliers also contributes to resilience and agility leading to more rapid response in a changing economic climate. Additionally, these steps have had a significant impact on brand perception, with one survey suggesting an additional 670,000 consumers would use Coca-Cola products more regularly as a result of their commitments. This shows that supplier diversity has positive repercussions for suppliers and buyers.
Another company that has made diversity a central part of its operations and one of the criteria for evaluating supplier performance is Chrysler Group. They require that 10% of their Tier 1 suppliers’ purchases be made from certified diverse suppliers, which over the last 40 years, this has translated into nearly $52 billion worth of parts, materials and services from such companies. To further encourage these relationships, Chrysler holds a biannual supplier training week on quality and engineering systems, along with a Matchmaker and High Focus program.
The impact of this is that Chrysler has been named Corporation of the Year by the National Minority Supplier Development Council. There has also been a multiplier effect, with other companies being encouraged to develop their own diversity programs.
As mentioned in a previous blog, commitment from the executive team is crucial to the success of diverse supplier programs. One company that has proven this is Sodexo, where 68% of senior leaders reported frequently communicating about diversity with their employees, and 73% agreed or strongly agreed that they emphasize diversity in their business strategies.
Royal Bank of Canada (RBC) stands out as a Canadian business that illustrates the positive impacts of specifically integrating supplier diversity into their procurement policy. They also have forged partnerships with businesses led by minorities and women, which has promoted equality in the business world.
For its part, TELUS has adopted a proactive approach by collaborating with organizations such as Women Business Enterprises Canada Council (WBE Canada). This gave the telecommunications giant access to a wide network of diverse suppliers and was further proof of their commitment to an inclusive economy.
Mentorship and financing programs for minority-owned businesses are among the steps taken by Shopify. The impact of these can be seen not only internally, but also across marginalized communities, contributing to a more equitable society.
If we look at a further breakdown of the case of Johnson & Johnson, we can see that their choice to invest in businesses belonging to minorities, women, LGBTQ+ people, veterans and disabled people was a way to strengthen the resilience of their supply chain while encouraging innovation through a variety of perspectives.
Firstly, they broke down their investments into production, professional services, IT and medical supplies. This led to more stability and flexibility with diverse sources for materials. It also meant enjoying new approaches to management and resource optimization. The innovative IT solutions they were able to procure were also more secure and efficient. The COVID-19 pandemic highlighted the importance of responding quickly to medical needs with essential products.
They also funded projects and initiatives, such as the research and development of new medical technologies produced by minority-owned businesses. Supporting tech start-ups led by women and minorities added to Johnson & Johnson’s competitiveness and adaptability. Through more than 30 partnerships, they have been able to identify and support diversified suppliers. Their mentorship programs and networking events help to shine the light on small businesses and social enterprises.
The economic impacts of these measures are significant. During the COVID-19 pandemic, their diverse supply chain was able to quickly adapt and produce personal protective equipment, which allowed them to remain resilient. Just one example of new products and services is a women-owned business that came up with a more effective and comfortable medical mask, which Johnson & Johnson quickly adopted.
There have also been social impacts, such as job creation and local economic development that occur beyond the company’s operations, along with benefits for minority communities.
These are just a few examples of companies who have demonstrated that supplier diversity is not just a business strategy to remain competitive, but also a way to create far-reaching effects on a number of levels for both buyers and suppliers.
Maïa, Inclusive Growth
As a project of the Quebec Business Women’s Network (QBWN/RFAQ), one of our main goals is building awareness and education through training and workshops on an array of topics. So, if the subject of supplier diversity seems overly complex or you don’t know where to start, we are here to provide you with the information you need and to offer guidance. As discussed above, Maïa Connex is also a platform that serves as a hub for business opportunities across Canada. We also hold networking events along with our partners.
Regardless of where you are in your journey with supplier diversity, we encourage you to sign up for our training programs, which are offered online here :
To take your network of diverse suppliers to the next level, join our platform. We also invite you to sign up to stay tuned for future blog posts. In addition, you will be notified of any updates and upcoming workshops.
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