Establishing diverse supply chains and protocols is not hard or complicated; it requires a strategy, and the rewards can be manifold. Supplier diversity can bring a broader and richer pool of expertise, agility, and innovation to enhance and inform every one of the businesses involved. Having a supplier diversity approaches good for the planet and business because it is a direct contributor to social and economic sustainability.
Supplier diversity is not sustainable as part of a more exhaustive ‘box-ticking’ exercise without due care, and attention is given to what it actually means in reality. Supplier diversity works best when companies genuinely strive to allocate spend to a diverse supply chain and ensure that all relevant suppliers have access that enables them to tender for business and secure contracts.
While the advantages of diverse suppliers are clear, there are many benefits for the company in question. Here are five reasons why…
It offers commercial advantages
Embracing a diverse group of suppliers benefit companies company in commercial ways as well as ethical ones. Some advantages include improved efficiency, brand favourability, resilient supply chains, and increased customers and consumers.
It drives competition and innovation
As more companies embrace supplier diversity, they will attract established and expert businesses that are offering innovative solutions to problems and keeping the market competitive. This general trend will help keep suppliers’ sectors agile and the supply chains in which they are involved more resilient. Evidence also routinely shows that smaller businesses and individuals are often the most effective sources of another critical ingredient for any company seeking to maximise its relationships with its suppliers: innovation.
It enhances your brand
Inclusive companies, work well and ethically with their suppliers tend to enjoy greater commercial success as a result. After all, the world is on the move, with people travelling further and expanding their horizons more than ever. Customers are becoming more and more diverse, so a savvy business must adapt and evolve according to this trend. As word spreads about a company’s commitment to inclusive procurement throughout its supply chain, so the associated publicity tends to improve accordingly. More and more consumers want to be associated with companies that are making the right commercial and ethical choices; while at the same time voting with their feet if companies aren’t meeting these needs. Consumer activism is now part of how business is done which either contributes to losing or driving sales.
It helps with job creation
Having a robust supplier diversity programme can have a real effect on the economy. There is an estimated 95% of small businesses in the world that provide 60%-70% of employment. Spending with diverse suppliers enlarges their capacity to hire more people, which directly drives economic growth.
It’s the right thing to do
Maintaining a healthy supplier diversity programme should be a fundamental part of corporate and sustainability strategies. It reflects a commitment to the United Nations sustainability goals as well as drives business performance. Inclusive procurement through supplier diversity also addresses obstacles or unrealistic expectations of suppliers. Quite aside from helping the company meet its stated visions and values, supplier diversity keeps competition fresh, allows for fairer, increased opportunities for all and challenges systemic issues at the core of supply chain management.