Once your Supplier Diversity program is established and Tier 1 reporting is well underway, it's time to look toward launching a Tier 2 initiative. By requesting your prime suppliers to report diversity metrics, not only are you deepening your economic impact, but you are creating expanded opportunities to strengthen your supply chain. Often there are commodity areas in which it’s challenging to influence Tier 1 diverse spend. With this challenge, though, comes the opportunity to drive inclusion of diverse suppliers through your prime suppliers. Here we outline three tools that will help you establish and manage an effective Tier 2 Supplier Diversity program.
1. Web-Based Tier 2 Portal
Leveraging technology to manage your Tier 2 program frees your team up to focus on the strategic aspects of Tier 2 as opposed to the time consuming, tactical tasks. This includes automation of inviting primes, sending report notifications and reminders, monitoring compliance status and running reports to measure progress. Whether you have simplistic needs or more advanced needs such as reporting at business unit or contract level, a Tier 2 portal allows you flexibility and configuration to meet your organization’s specific needs. Above and beyond requesting indirect and direct spend, you can control which categories are accepted or even drill down to the level of which certifications you accept.
By automating the Tier 2 process and incorporating a flexible web-based, client configured portal, you make it easy for primes to report, which increases adoption and compliance and enhances your metrics.
2. Comprehensive Database
To build a Tier 2 program that really works, you must be able to verify the status of those direct suppliers your primes are reporting on. Supplier data changes frequently due to mergers and acquisitions, ownership changes and updates to certification or classification status. Having a Tier 2 system that links to a comprehensive database is a valuable tool that provides verification of direct Tier 2 suppliers’ diversity or small business status, helping you mitigate risk and maintain the integrity of your diversity metrics.
3. Tier 2 Program Management Services
If internal resources for expanding your program are limited, consider engaging a provider that offers a Tier 2 Program Management service. Tier 2 Program Management provides you with access to experienced staff who utilize best practices to manage the day-to-day operations of the program, enabling you to focus on more strategic projects. Program management may include opening and closing reporting periods, analyzing variances between periods, and compiling Tier 2 spend reports.
Look for a service that offers initial and ongoing training for your prime suppliers, assists prime suppliers with the reporting process, and provides follow-up with non-responsive primes and validating reported spend amounts.
An effective Tier 2 Supplier Diversity program maximizes and strengthens your overall program, in addition to driving economic success through the creation of supplier diversity programs within prime suppliers. Whether you choose to manage your program internally or enlist an external program management service, the right tools will enable you to establish a successful Tier 2 Supplier Diversity program that delivers real results, benefiting the organization's bottom line and increasing shareholder value.