Ten Tips to Diversify the Supply Chain

Ten Tips to Diversify the Supply Chain

The next frontier for diversity

The supply chain includes every organization that is involved in bringing a good or service to the consumer. In this chain, companies purchase raw materials, products and professional services from other, often smaller organizations. Supplier diversity means that small and medium-sized organizations, owned or operated by diverse individuals, have equal access to these opportunities, allowing them to grow their businesses and grow the broader economy at the same time.

Getting started

1. Make a commitment to a bias-free supply chain.

The first step to creating a supplier diversity program is to make a commitment, internally and externally, to ensure that purchases are made without bias.

2. Take stock of diversity in the supply chain.

Collect demographic information about your current suppliers. Some people worry this is illegal or discriminatory – it is not. Collecting information on racial and ethnic characteristics is permitted if it is to address the underrepresentation of visible minorities and other historically under-represented groups.

3. Express the value of diversity in the supply chain.

Bringing diversity to the supply chain is not just the right thing to do. It makes good business sense, providing purchasers with more options on products and pricing. And when an organization’s leadership goes on record with a commitment to make change happen, it will.

4. Develop a supplier diversity program by learning from others

There are several organizations in Canada, including RBC, TD and YMCA, with a track record in the field. Good practices can also be found at US-based companies, particularly in the Chicago area. These practices can be studied and emulated to create a strategy.

Climbing the ladder of supplier diversity

5. Train staff on the supplier diversity program.

It is important to train both buyers and managers within organizations on the importance of diversity in the supply chain, as well as any new policies and procedures that are developed as a result of the creation of the supplier diversity program.

6. Award points in the RFP process for minorityowned/ led businesses.

Many of the best supplier programs allot points for organizations that are either owned/led by minorities or that have their own supplier diversity program in place.

7. Engage external partners to reach out to new suppliers.

Proactive efforts to identify minority suppliers are necessary for a successful supplier diversity program. Organizations such as the Canadian Aboriginal and Minority Supplier Council and the Diversity Business Network can help.

8. Build the capacity of minority suppliers through mentoring.

Some minority-owned/led businesses are not yet ready to compete for large contracts. Organizations can mentor them by, for example, helping to explain the RFP process.

9. Track dollars spent with minority suppliers.

Each year billions of dollars are exchanged between businesses providing goods and services to each other. Organizations can track how much of their dollars are spent with minority suppliers to gauge the success of their supplier diversity program.

10. Report on the results of the supplier diversity program.

Publicly reporting the progress of your supplier diversity efforts, in an annual report for example, can ensure that your organization continues to progress in its efforts to meet its targets.