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Simple Steps for Growing Supplier Diversity

By October 1, 2023No Comments

“When you can demonstrate short-term success and communicate it – both inside and outside the company – it helps to smooth the pathway to the funding, staffing, and commitment required for longer-term impactful change.”   – Lois Eichacker, VP of Customer Success, Supplier.io

Supplier diversity is one of the most impactful, meaningful programs led by procurement, and the effects of a strong supplier diversity program can be felt throughout the business, helping to drive innovation, competitiveness, brand reputation, revenue, and cost savings. 

But building a strong, sustainable supplier diversity program that will achieve long-term growth and impact and scale alongside the needs of the business is a tall order for procurement. Challenges with staffing, budget, data deficiencies, and decision-maker buy-in can stall or, at the very least, complicate procurement’s efforts. 

To explore solutions to these challenges and lay out a plan of action for building a long-lasting supplier diversity program, we recently spoke with Daniel Dorr, VP of Marketing, and Lois Eichacker, VP of Customer Success, both from Supplier.io. 

Daniel and Lois provided tactical and strategic recommendations for how procurement can overcome the challenge of building a robust supplier diversity program that will stand the test of time. 

Establish a solid baseline

Establishing a solid baseline is the first step in building a resilient supplier diversity program. It empowers procurement with knowledge about where they stand, who their partners are, and their potential for growth. 

Steps to building a supplier diversity baseline:

  1. Understand the current supplier database: Take a deep look at the composition of the existing supplier base. Who are the suppliers and what products or services do they provide? By understanding current suppliers, procurement can gain insights into opportunities to expand.
  2. Monitor certification status by diversity category: Learn the certification statuses and diversity categories your current suppliers belong to. This helps to identify suppliers that already contribute to your diversity goals and those that may require additional support. It also enables procurement to measure progress as they move forward.
  3. Acquire a database: Expanding your supplier diversity program often requires bringing new, qualified, and certified diverse suppliers into the fold. Access to a database or network of diverse suppliers is a key resource. These new additions inject fresh perspectives, innovation, and opportunities into your supply chain.
  4. Learn from peers: While benchmarking is a common practice, it’s important to emphasize that, in this context, it’s not just for goal setting. Benchmarking is a tool to gain a comprehensive understanding of the broader possibilities for your supplier diversity program. By benchmarking against industry peers and best practices, you can identify potential avenues for growth.
  5. Align with the company’s mission and vision: As you benchmark, keep a keen eye on how your supplier diversity program aligns with the business’ mission and vision. Consider questions like, “How does supplier diversity fit into our overarching goals?” and “What does success look like in the long term?” This alignment will help procurement create a roadmap for the program’s development over time.

Access actionable data

Without accurate and reliable data, supplier diversity efforts may struggle to deliver the desired results. Ensure that your data is accessible and actionable. Reliable data should also inform strategic decision-making and provide a clear picture of your program’s progress and growth potential as it matures.

Balance short-term versus long-term thinking

Long-term goal setting and program planning doesn’t mean ignoring the short-term challenges or milestones. As Lois sayid, “you’ve got to overcome those shorter-term challenges to stay in the game long enough to tackle the longer-term.” 

However, it’s a balance. Too much attention to short-term goals or wins also means procurement may have put themselves in a position where they’re having to “sell” the same business case over and over again to internal stakeholders.

Know how to influence and secure buy-in

Relationships are the lifeblood of supplier diversity. Building strong ties with diverse suppliers and including diversity conversations early in the RFP process can yield significant benefits and help procurement prepare diverse suppliers to make the most of each opportunity.

Next, communicate those success stories and show the impact they’re having – the quality and results will help procurement demonstrate the real value of supplier diversity to the business and help to generate long-term buy-in. 

Daniel pointed out that the appetite for supplier diversity is growing, but to sustain that growth procurement must keep communicating the value at every step.

“For the last three years, we have been strategic to the company. We got a seat at the table,” he said.

“People knew we were important – not just for cost control but for risk management, but for brand value and positive impact on the communities we serve. Supplier diversity programs are part of the value that procurement offers the company. We’re in it to stay, and that’s great news.”

Be clear about expectations

To sustain long-term change, clarity is key. Define what your company aims to achieve, the level of support available, and the program’s goals. Set realistic expectations and communicate them transparently, creating a clear roadmap for success.

Ask questions like:

  • What is our company trying to achieve?
  • What level of support do we have?
  • What is the goal for this program?

Once a vision is established and buy-in is achieved, Set realistic expectations around timeframes. Build in milestone dates, objectives, and an all-important feedback loop to capture progress and course-correct, maybe even refining that original mission and vision based on what the data shows.

Look beyond spend when measuring success

While measuring success, it is important to look beyond spend alone and into metrics like diverse supplier count and contract size.

As Lois said, “If you’re talking about impact, you really have to take a bigger, broader look at numbers. Impact means number on a scale. That means number of suppliers and contract size.”

For example, many organizations have a lot of diverse spend but concentrated in very few suppliers. “This can look great out of the gate,” Lois continued, “but that’s not the way to build a long-term sustainable program where you’ve got to develop muscles at continually finding qualified diverse suppliers to feed into the RFP funnel.”

Build as you Mature

Supplier diversity isn’t just a box to tick on a corporate social responsibility checklist. It is a key business driver that can have a lasting impact on the business. But building a strong program that continues to bring value over the long-term presents procurement with some unique challenges that they need to meet with intention, clarity, and innovative, strategic thinking.


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