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January 20, 2025

Challenges associated with supplier diversity

Diversity in the supply chain is an increasingly important topic for large buyers. Whether it’s the COVID-19 pandemic, which highlighted vulnerabilities in traditional supply chains, or changing societal expectations, including legal requirements, companies are being called upon to rethink their procurement strategies.
While we looked at ways to promote supplier diversity in a previous post, we wish to address some of the challenges you may face in attempting to do so and provide possible solutions to overcome them. 

Prejudice and unconscious bias

To begin with, purchasing decisions can be influenced by underlying prejudices and unconscious biases. Some companies require employees to take training sessions that create an awareness of an indvidual’s personal beliefs and help them make more equitable choices. They may also employ analytical tools that monitor and correct decisions that are influenced by these biases. In this way, they help to create a more inclusive corporate culture with regard to purchasing and hiring. 

Organizational alignment 

A company may also struggle to achieve supplier diversity because of competing internal priorities. If this is the case, a step that can be taken on an organizational level is to create a diversity and inclusion council that guides priorities and strategies, oversees results and ensures goals are integrated across the company. 

Complex processes 

Navigating diverse procurement and certification processes can prove challenging at first. However, companies that invest in training and mentorship in these areas will ultimately see the benefits. This may take the form of workshops or online courses that help to understand the various requirements and standards. One such company that has taken these steps is IBM, and they have not only offered this support internally, but also to external suppliers. By giving them insights into IBM solutions, this better prepares the suppliers for dealing with all that is necessary to obtain and complete a contract.

Limited objectives 

While some companies start the process of developing a diverse network of suppliers, they may stop at tier 1. This means that they are only focused on spending directly with a diverse organization. By expanding their strategy to include tier 2 diverse suppliers through subcontractors, they support greater inclusion and resilience, while benefiting from the unique perspectives and creative solutions from a largerr number of suppliers. 

Competition and budgetary constraints 

Businesses need to overcome obstacles such as heightened competition and budgetary constraints, which requires strategic planning and close collaboration with suppliers. This can be achieved by providing financial and logistic support. For example, Procter & Gamble has helped their suppliers create their own network of diverse suppliers and use financing programs to improve their access to liquidity and reduce their debt. They have also worked with organizations such as the National Minority Supplier Development Council (NMSDC) to enhance skills and increase competitiveness and innovation.  

Isolated initiatives 

If a company engages solely in short-term strategic events, it is quite likely that they will not create a lasting commitment with diverse suppliers. Instead, they need to incorporate diversity objectives into their overall business strategy. As in the case of Target, this may require a significant investment in minority-owned suppliers. And like other challenges we’ve discussed, development and mentorship programs can lead to many benefits, including solid, long-lasting relationships with suppliers and a greater chance of their success. 

 

Maïa Inclusive Growth's role

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 you are a large business seeking to overcome challenges and engage with diverse suppliers, we are here to provide you with the information you need and to offer guidance. Maïa Connex is also a platform that serves as a hub for business opportunities across Canada, and we 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 :

Now that you better understand these terms, you can put this knowledge to use by joining our platform, which is a hub for business opportunities across Canada, including RFPs, tenders and direct contracts. 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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