Why Partnering With Diverse Suppliers Is a Win-Win for Businesses
As companies continue to prioritize diversity and inclusion (D&I) in the workplace, D&I leaders are finding ways to promote diversity through every line of business. While most D&I initiatives focus on increasing diversity through equitable hiring practices and coaching employees on inclusive practices, they often overlook one key area of contribution: suppliers. Supplier diversity is more relevant – and necessary – than ever before. It’s long been a corporate focal point, thanks to federal requirements to demonstrate inclusiveness and equal opportunity.
As the link between the business and its suppliers, procurement teams have a unique opportunity to meaningfully contribute to corporate D&I goals by consciously partnering with diverse businesses, defined as any company that is at least 51% owned by persons identifying with underrepresented groups. By partnering with these companies, enterprises can both drive competitive advantage and deliver on their D&I promise. While contracting with diverse suppliers contributes heavily to the bottom line and promotes core values, it also helps ensure business continuity by embedding resilience into enterprise supply chains. With ongoing supply chain disruption, more and more enterprises are understanding the massive impact that contracting with more diverse and local suppliers generates.
Why work with diverse suppliers
Doing business with diversity owners earns you a competitive edge, increasing the buying power of the consumer. Diverse suppliers provide the unique opportunity of access to new products and solutions over the competition, maintaining profits, growing a customer base, and encouraging innovation. Business diversity expands the definition of supplier diversity, reframing it as a strategic business imperative, rooted in procurement and economy as it shifts the mindset that expands the scope of diversity.
Supplier diversity can improve brand reputation, customer loyalty, top-line growth and bottom-line savings. Diversity initiatives come with benefits, like cost reductions, access to specialized services and products, promoting social justices, cultivating relationships with wider networks to strengthen economic participation. Despite the influence of globalization, collaboration with smaller companies occurs when proximity is part of the equation, leading to more personal interactions, trust and satisfaction.
Driving Innovation
By working to keep up with larger business demands and a growing minority market, diverse suppliers provide the unique opportunity to produce new products and solutions to overcome competition. Their typically smaller size can provide the advantage of being able to adapt more quickly to market changes and business fluctuations. This all makes diversely-owned businesses prime candidates for strategic relationships with larger companies.
Larger organizations have found that their smaller, diverse business partners can help them improve their own efficiencies and drive innovation.
Provide Social Impact
Diverse suppliers have a large impact on the communities in which they operate. Companies that source from diverse suppliers can help them grow which will, in turn, create jobs, build local economies, and bring benefits to those communities. Enterprises that prioritize supplier diversity set their business up for success while simultaneously enriching the lives of their employees, their supplier partners, their customers, and the greater communities they serve.
Diverse suppliers can be a cornerstone of any organization’s success, helping companies to ethically and efficiently source services while maintaining profits, improving the economy and encouraging innovation. Through supplier diversity programs, purpose-driven businesses can live up to their core values and make meaningful contributions while gaining some serious ROI. Commitment to diversity must extend beyond D&I departments, and businesses that take every opportunity to bake diversity into their business will be better equipped to navigate future disruption.