7 Important Tips for a Successful Supplier Diversity Management

Supplier Diversity Management: 7 Important Tips for Success

Gone are the days when businesses operated with suppliers from selected backgrounds. Things have changed over the last few years. For businesses, diversity has become the need of the hour. It is essential to not only survive but also maintain their competitive edge, especially following the outbreak of the Covid-19 pandemic in 2020. As a result, most businesses have switched to a supplier diversity model of partnership these days. While it may sound like an exciting idea on the surface, managing it can be an uphill task.

So how do you manage a diverse group of suppliers or individual suppliers in a supply chain? When you come to think of it, it may appear tricky on the surface. But you can accomplish this task with finesse by following the tips given below.

1. Make supplier diversity a core value of your company right from the beginning

Companies that include diversity in their DNA from the beginning are the ones that retain a diverse range of suppliers. Such companies analyze the new things a supplier brings at the time of collaborating with them.

Taking a leaf out of the book of such companies, choose suppliers who bring something new to the table. If you include such suppliers in your supplier base, it will not only help you diversify your supplier base but also manage it proficiently as you would have a good understanding of their goods and services.

2. Make your supply chain more transparent

Your organization may have both majority and minority suppliers. But you need to focus more on the latter category of suppliers to diversify your supply chain. Share with them the details of the products or services your organization needs. This will assist them in working out a strategy with which they can better engage with your business organization. Ultimately, it will benefit both your business organization and suppliers alike.

For a better supply chain diversity, you will need to adopt transparent practices. With such methods, you can enjoy both benefits at once. Apart from identifying diverse suppliers who are a part of your supply chain, you can also diversify your spending for using their products or services.

3. Identify your supply chain diversity targets and center your business policies around them

Most business organizations prefer to link themselves with multiple suppliers instead of a single one. They do so to diversify their supplier base. If you also wish to embrace this business model, make sure you know in which areas you want it.

If you want suppliers from women-only or racially diverse groups or any other group, talk to the internal stakeholders of your business organization about it. The more you educate them about such suppliers, the better would be the outcome. A good understanding of such suppliers will help the stakeholders of your business organization better evaluate their services.

4. Make an organization-level commitment toward supplier diversity

In any business organization, the responsibility of bringing in the supplier diversity and managing it rests on those who operate at the top level. It begins at the level of a CEO, and thereafter, a senior manager supervises it. A CEO of a company puts their signature on the goals and matrices to approve it. Further, a senior manager takes care of them in the subsequent stages.

If you happen to be the CEO or the senior manager of your company, try heightening the awareness of supplier diversity and its benefits among your employees. In the long run, it will help you diversify the supplier base in your business organization.

5. Ingrain diversity in your company’s procurement to make it a reality

You can translate your idea of supply diversity into reality only by linking it with the procurement of your company. One way to do this is to place your order with a wide range of suppliers instead of ordering your essential items from a single supplier.

To improve procurement, automation and digitization are of paramount importance. If both these aspects are not in your scheme of things, think of ways to include them in your strategies. The sooner you do it, the better. It will not only be helpful for the procurement process in your company, but it will also help you analyze your spending and fine-tune your strategy to tailor it to your needs.

6. Have an additional training program to spread awareness regarding supplier diversity management among stakeholders

The variation in the understanding of supplier diversity among the internal stakeholders and employees of your business organization is a natural phenomenon. Just like the five fingers of your hand, their understanding is also bound to vary.

If you wish to manage supply diversity in your business organization, its internal stakeholders and professionals must have a good understanding of it. The best way to ensure it is to invest in a training program.

7. Attach a higher degree of importance to data sharing

Most procurement companies face a major problem. In the majority of such companies, only a select few have access to real-time data and insights. As a result, the majority of business stakeholders and employees remain unaware of both these aspects. If data and insights are confined to just procurement personnel, try widening it so that all stakeholders get to know about it.

Just like business or procurement professionals, real-time data and insights related to procurement are also important for stakeholders. As far as the requisite data is concerned, think about including the data linked with supplier registration, onboarding processes, and supplier diversity status in your scheme of things.

Final Thoughts

Nothing else paves the path for success for a procurement company as much as the efforts of those professionals who supervise its supplier diversity. Such professionals constitute the backbone of procurement companies. If you are one of them, you can take your business organization to the peak of success by implementing the right supplier diversity strategies. Follow and implement the aforementioned tips to attain the goal of diversifying the supplier base of your company with finesse.

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