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.
Once a business has recognized the value of supplier diversity and taken the initial steps to come up with their own plan and goals around it, there are a number of ways in which they can optimize it. One thing that is crucial is that initiatives in this regard are part of an overall strategy and not piecemeal.
Approaches to promoting supplier diversity
Promoting supplier diversity is not one single action, but instead relies on a variety of measures and approaches across different areas of a company. While it is the responsibility of many individuals, it is essential to have buy-in from the executive team in order for efforts to be successful.
A good starting point is to build greater awareness of the importance of supplier diversity. This may take the form of training on subjects such as understanding evaluation tools and certifications used to identify diverse suppliers, along with the benefits. Rather than a one-off session, training in this area should be completed on a regular basis in order to keep up with changes and deepen knowledge. It may be beneficial to use a mentorship approach as well to share expertise. In addition to any steps taken internally, companies may wish to collaborate with organizations that specialize in diversity and inclusion, such as Maïa, McKinsey & Company, or the Canadian Centre for Diversity and Inclusion, among many others.
Building upon this training, purchasers for large buyers can feel more confident in selecting diverse suppliers. As mentioned, they also have access to evaluation to tools to assist them in making this process more efficient. Among them are Maïa Connex, WBE Canada, National Minority Supplier Development Council (NMSDC) and Women’s Business Enterprise National Council (WBENC). In addition, companies can organize site visits to audit potential suppliers and ensure they will help in reaching objectives. To further ensure that suppliers correspond to the company’s criteria, calls for tender should be structured to include them as targets. Those that meet these can then be gradually incorporated into the supply chain, beginning with smaller contracts, to ensure a smooth transition.
Purchasers aren’t the only ones who have a role to play. The legal department needs to ensure that contracts meet any requirements and are compliant with established laws and standards. The focus of the finance department is to ensure that budgets allocated to diverse supplier targets are followed, and that monetary objectives are achieved.
In addition to employees and suppliers, it is important to build awareness among clients and investors of the benefits of a diverse supply chain. In doing so, companies can establish a corporate culture that promotes these values, and one that they can be proud of. Achievements in this respect should be amplified through both internal and external communications, as diversity is sought after by potential job-seekers and consumers.
Some companies rely on a diverse supplier advisory council to act as a bridge between the company and its suppliers and to ensure alignment with the company’s goals. This can also help to identify areas for improvement, strengthen relationships, drive innovation and enhance efficiency. In fact, Maïa holds meetings exclusively for large companies to share the best practices. Write to maia@maiaconnex.com if you're interested in joining the Practice Committee.
Measuring and evaluating supplier diversity
To ensure that a business is on the right path toward achieving and promoting supplier diversity, it’s important to implement relevant key performance indicators (KPIs) such as: representation and diversity, spending by purchasing category, participation rate and lifecycle of diverse suppliers, customer satisfaction rate, risk management and sustainability, and local economic and social impact.
Interactive dashboards can be established to track spending with diverse suppliers. Regular snapshots can also be taken and interpreted by data analysts to assess and make necessary adjustments. This can also help to measure the return on investment (ROI) of various initiatives. Indeed, businesses should be able to see an improvement in economic performance, increased innovation and the achievement of environmental, social and governance (ESG) objectives. Software, such as Tableau, SAP Ariba and Power BI can be useful for carrying this out.
Among the other expected impacts is an increase in customer satisfaction and loyalty, particularly among those who value diversity and inclusion, and see this reflected in the company. Employee morale can also be improved by an inclusive and diverse work environment. New ideas and perspectives are also benefits of integrating diverse suppliers, which can lead to innovation in product development. By increasing competition among suppliers, companies can also see enjoy cost reductions. In terms of contributions to local communities, partnering with diverse suppliers strengthens the economic fabric of underrepresented communities and enhances the company’s reputation as a socially responsible entity.
Application to various industries
Financial services is often considered to be a sector that is lagging behind in terms of diversity, with few investment firms being minority owned. As a result, Goldman Sachs launched their “10,000 Small Businesses” program with initiatives to expand their supplier network to include those owned by females and minorities.
In the technology industry, Microsoft collaborated with minority-owned business to develop case-management solutions, using the Microsoft Dynamics platform. As a result, existing technologies were modernized and business partners accessed new opportunities in the market. This is just part of Microsoft’s diverse supplier strategy.
Baker Mckenzie and Fish & Richardson are two law firms to have received Accenture’s “Outside Counsel Diversity Award”. As an element of their overall commitment, this recognizes advances made in equity, diversity and inclusion in the legal sector, which has historically had underrepresentation of minorities. The variety of perspectives supports innovation and enhanced services.
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 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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