The supplier diversity initiative has been around for 50 years now, pioneered by a handful of companies that recognized the importance of supplier diversity as a social program long before it became clear just how much value diverse suppliers bring to the table.
Whether your supplier diversity program is in its infancy or a mature, well-established part of your corporate culture, it's good to revisit what successful companies and independent reports have to say about why partnering with diverse suppliers is important.
In this post, we’ll tell you what they’re saying in their own words.
The Value of Supplier Diversity
From global manufacturers to major league sports franchises to food service providers, corporations across the country and around the world see the value of supplier diversity.
1: “Cummins understands that businesses owned by diverse suppliers help contribute to the overall economic growth and well-being of the communities in which we live and work. We also understand that establishing strategic partnerships with our suppliers helps create value for our customers and provides us with a competitive advantage. Collaborating with such businesses to provide goods and services to our company creates a cross-cultural competency that only comes from multiple perspectives.”—Denis Ford, corporate indirect purchasing international leader, Cummins Inc.
2: “We should be appreciative of diversity of thought because that's what drives innovation. ... If you have different thoughts in the room somebody will come up with an idea that everyone can build off of ... and that only happens when you have different cultures, lifestyles and backgrounds in the room and all that comes into play when creating innovation, efficiency and awesome ideas—building businesses. If every organization really embraces and utilizes diversity of thought in their overall infrastructure and operations I think we are doing a great thing.”—Corey Smith, senior director, supplier diversity, Major League Baseball
3: “Diversity helps businesses and communities thrive. It’s that simple. When there are more options, more voices and more ideas, there are more opportunities for business excellence.” —Darlene Fuller, senior director of supplier diversity, Sodexo
4: “Our Supplier Diversity Program has exposed Comcast and NBCUniversal to an entire vendor marketplace that we might never have identified before. These exceptionally talented partners have unique and niche skills that have helped us develop new products, marketing campaigns, business strategies, and more. Over the past six years, we have spent more than $11 billion with diverse suppliers, and these partners have truly made our business better.” —Peter Kiriacoulacos, chief procurement officer, Comcast NBCUniversal
50 Years of Supplier Diversity
A handful of companies have recently seen their supplier diversity programs reach the 50-year milestone. What do these pioneers say about the continuing importance of supplier diversity?
5: “[Workplace inclusion and supplier diversity] initiatives create goodwill and drive employee engagement, as well as address the needs of an increasingly diverse customer base. But most of all, our diversity and inclusion strategy propels the business forward. That is a goal any organization can appreciate.” —Corey Anthony, senior vice president and chief diversity officer, AT&T
6: “I often get asked, ‘What’s the business case for supplier diversity?’ My question in response is always ‘What’s the business case for using any supplier?’ ... If you’re going to outsource and you’re a technology company—an innovative company like IBM—you’re always seeking the best supplier. If you want to be the best, you must seek the best. You can’t eliminate a large component of the environment, because if you look at Women-Owned Businesses (WBEs) and Minority-Owned Business (MBEs), those are the up-and-coming suppliers. Most of the innovation is being done by small companies. ... The business case is always to make, buy or borrow, and if you decide to buy, you better be sure you understand what’s in the marketplace and what’s the best. You can’t eliminate anyone because they’re woman-owned or minority-owned. That’s something IBM has known for years and other companies are just coming to realize now. That’s our competitive advantage.” —Michael Robinson, program director, global supplier diversity, IBM
The Next Generation of Supplier Diversity
After 50 years, supplier diversity programs have changed and matured to become fertile ground for supplier development and growth, as well as hotbeds of innovation and creativity. The next generation of supplier diversity programs are challenged to continue growing to include more diverse suppliers, to embrace a new demographic reality, and to use the power of success to break down the remaining barriers to business equality.
7: “The future of supplier diversity is all about delivering results. With the demographics of this country changing so rapidly, the fate of our nation's economy rests on the growth of minority businesses. Minority businesses represent the biggest potential growth sector in our economy. We need to be able to create, build and sustain minority businesses. And more than ever before, we need to accurately report our impact to win public support for what we do.” —Louis Green, former interim president, National Minority Supplier Development Council
8: “Industry groups, corporations, third-party certifying agencies and advocacy groups need to stop operating in silos. Together we can break barriers and drive bigger and better results while continuing to make an impact in the diverse supplier community.” —Eva Boratto, executive vice president, controller and chief accounting officer, CVS Health
9: “Millennials are the largest living generation, and one of the things that tops their “must haves” is transparency. They want to see exactly what is happening during any interaction at any point from beginning to end, and retail is no different. Retailers that can show they’re committed to partnering with suppliers who are minority owned, women owned, creating sustainable products, or otherwise tap into a facet that meshes with the millennial ethos, are better able to broker a more trusting, reliable relationship with Gen Y.” —Nicky Jackson, founder and CEO, RangeMe
The Bottom Line
Supplier diversity professionals often encounter comments from uninformed individuals that working with diverse suppliers is simply a responsibility or some form of handout. Multiple reports show that this is not the case. In fact, companies that embrace diversity and inclusion in the workforce and the supply chain benefit financially.
10: “On average, supplier diversity programmes add $3.6 million to the bottom line for every $1 million in procurement operation costs.” —The Hackett Group’s Group's 2015 working capital survey
11: “Supplier diversity is evolving from a check-the-box corporate social responsibility requirement to a strategic enabler providing access to innovative products and increased market share in new and developing communities. ... Top-performing organizations are taking advantage of this opportunity, and applying the tenets of social diversity to new areas such as supplier partnering, reputation management and global expansion with exceptional results.”—Laura Gibbons, research director, The Hackett Group
12: “Our research finds that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians.” —McKinsey & Company, “Diversity Matters”, 2015