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Supplier Intelligence

The Keys to Building a Strong Tier 2 Program

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Establishing a Tier 2 supplier diversity program is fundamental in advancing and maturing your supplier diversity program. Strong Tier 2 programs are built on a foundation of measurable goals, timely communication, and the tools to help track and report spend.

Goals that drive strong programs

Setting the right goals for your Tier 2 program provides guideposts for you to follow as you implement various initiatives. At the top-level view, these goals should always be in alignment with your broader supplier diversity program goals and corporate objectives. More specifically, they should focus on making it easy for primes to report diverse spend to you:

  • One hundred percent reporting compliance each quarter – One hundred percent compliance may seem like a lofty goal, but when you make it easy for primes to report spend, that goal is within reach. Choose Tier 2 reporting technology that takes over manual, time-consuming tasks like sending reminders to primes in order to report spend. You can automate all supplier notifications through the system with a simple configuration, saving you time and money while supporting efficient reporting.
  • Increase the percentage of spend reported – A flexible Web-based, client-configured portal allows you to begin tracking Tier 2 spend rapidly and easily. The portal makes it simple for Tier 1 suppliers to report spend and for you to add new Tier 1 suppliers. Additionally, the software tracks direct and indirect spend with indirect allocation automatically calculated, rather than requiring you to manually add spend to a spreadsheet.
  • Increase the number of primes participating – You may have primes who utilize diverse suppliers but don't know how to report that spend to you or don’t know that you even want it reported! A Web-based supplier portal makes it easy to onboard primes into your reporting system. Configure the portal to your needs and provide primes with the necessary training required to begin reporting their diverse spend.
  • Increase the amount of spend reported with certified diverse suppliers – Allowing primes to add certified diverse suppliers increases your overall Tier 2 spend. Protect the integrity of your program by choosing Tier 2 reporting technology tied to a master database that verifies the status of certified diverse suppliers against third-party certification data.
  • Consider Tier 2 Managed Services – Outsourcing the effort to get Tier 2 suppliers to register can dramatically increase compliance if you or your staff are already swamped with other initiatives.

Measure against targets and evaluate often

Check in on your Tier 2 spend goals frequently as part of your supplier diversity program's overall metrics. Routine evaluation of reports will alert you to any potential problems before they occur and show you areas for potential improvement or growth.

Share the results of your Tier 2 initiative regularly with both C-suite personnel and the buyers who work with primes as a tool in order to increase supplier diversity buy-in and support throughout the company. Use business-unit reporting and other reports in order to show your buyers how their suppliers are impacting the organization's supplier diversity program. When buyers realize their important role in supplier diversity goals, they are more likely to help primes with Tier 2 spend reporting and diversifying their own supplier base.

Communicate your success

Everyone likes to hear that their efforts are paying off, but often we forget the importance—and positive impact—of communicating success. Increase support for your Tier 2 supplier diversity program by sharing successes such as meeting Tier 2 spend goals and increasing the number of Tier 2 suppliers with both internal stakeholders and your primes.

In addition to including primes in your regular Tier 2 evaluation and reporting, take extra steps to build those relationships through effective communication. Send thank-you letters to those primes who report Tier 2 spend regularly. Recognize primes who increase their spend with certified diverse suppliers year over year. This extra recognition goes a long way to encouraging primes to continue growing their own supplier diversity programs, which benefits your Tier 2 program and encourages economic equality.
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For over a decade CVM's mission has remained unchanged: lead the transformation of Supplier Diversity program management and support Supplier Diversity programs. CVM helps corporate supplier diversity programs in every stage of their evolution; from those that are just getting started, to the most advanced, world-class programs. Equipped with unparalleled data intelligence, superior technology and expertise guidance, businesses can effectively establish and advance their Supplier Diversity initiatives.