A two-year consecutive survey by Supplier.io revealed several challenges as well as opportunities in supplier diversity. This survey involved hundreds of diversity professionals who gave candid and data-proven information. In the business world, one cannot deny the relevance of supply diversity especially in today’s culture. For Thurman Co our interests have always centered around bootstrapping organizations to ensure they do not lose out on opportunities for maximizing growth. We have identified some of the supplier diversity issues that are likely to affect companies. We have also identified key solutions that can help solve these new challenges and turn them into supplier competitive advantages.
Generally, supplier diversity means having a base of suppliers that gives every player in the supply chain an equal competing chance. Most organizations take the step of having a supplier diversity program which is also a win for their organization’s reputation. Companies with supplier diversity programs have better relationships and opportunities with employees, partners, consumers, and the community in general. However, there can be a huge gap in making sure that supplier diversity programs are implemented. Yes, these programs involve workforce, corporate social responsibility, and customer base and places a lot of responsibility for the players. When there is a disconnect between what an organization advertises and what they implement, this can pose a challenge. Hence, the implementation of supplier diversity programs should be as crucial as creating the program in order to avoid skepticism.
The biggest challenge for most organizations in creating and implementing a supplier diversity program is due to lack of data. About 81% of organizations show concern and a lack of confidence in the data available to them. This is because procurement needs to be data-driven. Procurement controls the revenue and profit margins of most companies. Hence, insights and data relating to supplier diversity needs to be deep and reliable. It needs to consider all players: minority, women, veterans, LGBT, and small business vendors. The problem of reliability is caused by the changing nature of supplier information which makes tracking ineffective. However, organizations can base their information on Artificial Intelligence and Machine Learning driven data which has the capacity to match information from different resources. When data can be trusted, better decisions can be made to expand supplier diversity programs.
It is one thing to have a supplier diversity program and it is another to find suppliers that meet the criteria. Procurement criteria varies for different organizations and a successful company does not implement supplier diversity programs just for the sake of it. They should be able to find suppliers that meet the standards of quality, cost, risk, capacity, and reliability. These suppliers should also have a level of responsibility and should align with organizational goals and values to ensure a lasting relationship. When planning out programs, those in charge of supplier diversity programs should always ensure to look in the right place. Truth be told, partners are not scarce. There are available technologies that can help to find diverse suppliers who you can build a relationship with. Some of these technologies provide a pre-vetted supplier network to make the process seamless. You can also attend networking events that connect certified organizations with both represented and underrepresented suppliers.
This is often not talked about. But for the past few years, there is a growing concern and tension that matters surrounding diversity programs and suppliers may not be promoted as it should. The doubt that companies may not keep to their commitment of hiring diverse suppliers if there is no one pushing the requirements. The uncertainty and tension, however, is profound on the end of the suppliers. But then, there will always be an edge for companies who properly implement supplier diversity programs and a long-standing opportunity for suppliers to add to industry growth.
It can prove difficult sometimes to contact people who are involved with supplier diversity programs. The lack of communication between buyers and suppliers creates room for wrongful prejudice. For example, buyers may feel that woman-owned suppliers may not be able to produce standard products. This gap of communication can be bridged with more efforts from organizations in seeking out opportunities from suppliers. Suppliers can also ensure that they constantly promote their credibility and certification to increase their presence.
At Thurman Co, we specialize in supplier management which includes complete Supplier Performance Reporting as well as Supplier Capability and Capacity Assessment. We ensure the profitability of contract agreements. If figuring out this part of your business procedures (which is the most important) is a hassle for you, please make sure to book a consultation with us.