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CVM Supplier Diversity Blog

5 Quick Wins to Grow Your Company's Supplier Diversity

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Whether your company's supplier diversity program is brand new or well-established, growing the program should be a top priority. Several strategies for growth may be hiding in plain sight, giving you quick wins and demonstrating how the program ties in with your organization's strategic goals.

Convert suppliers from classified to certified. A proven successful method of achieving program growth is to partner with your key suppliers to convert their diversity status from classified to certified. Encourage diverse suppliers to complete the appropriate certification process, opening up additional opportunities for both sides.

Maximize spend with your certified diverse suppliers by letting them know about new opportunities or increasing spend with current contracts.

Vet and qualify new diverse suppliers. Expand your diverse supplier base by extending bidding opportunities to certified minority-owned companies. Certifying organizations like the National Minority Supplier Development Council, Women's Business Enterprise Council, National Gay and Lesbian Chamber of Commerce and Hispanic Chamber of Commerce vet diverse suppliers to ensure accuracy or use a supplier database that pulls information from multiple certifying organizations at once.

Make onboarding new diverse suppliers easier by implementing a supplier registration portal that prequalifies suppliers and routes their information to the appropriate purchasing manager in your organization when they register with your company. Or use a supplier locator tool that allows you to search from multiple national and local certification agencies at once to quickly find new suppliers.

Set smart goals based on industry standards. When setting goals for your supplier diversity program, make sure that they are both achievable and realistic, meaning you or someone you can influence controls the outcome. For example, rather than only tracking diverse supplier spend, consider also tracking diverse supplier count so you can identify areas where you need to expand your supplier base. This insures that you are not left in the lurch when a diverse supplier is purchased by a majority-owned company or lets its certification lapse.

Meaningful goals also tie supplier diversity to business strategy for the organization as a whole, drive business growth and increase shareholder value. Your goals should be reasonable and achievable, help to identify weak areas that need improvement, challenge the status quo and discourage complacency, confirm the need for change and provide strong motivation for change. This last point is critical for gaining executive buy in.

Gain executive buy in. Executive buy in is key to your supplier diversity program's long-term success because they authorize the resources and support necessary to sustain and grow the initiative. Review your program's goals and insure that they are relevant and aligned with the organization’s goals, which also need to be connected to the CEO and CPO’s strategic objectives. These include protecting and growing revenue, reducing costs, reducing risk and increasing overall shareholder value.

It’s critical to create, track and align relevant metrics that are specific to your organization’s core business drivers. These may include metrics such as average contract amount, cost savings and avoidance, revenue growth, category assessment and supplier rationalization. Consider utilizing a third party to assist you with defining the ROI for your supplier diversity program, delivering the tools you need to achieve executive buy in, budget and support necessary to enable program growth.

Establish a Tier 2 program. When you partner with prime vendors whose values and goals match your company's values and goals, working together to provide opportunities for diverse suppliers comes naturally. As your program evolves, your Tier 1 procurement contracts should include Tier 2 goals and reporting requirements. Talk with your primes to see if they already contract with diverse suppliers and ask them to report spend to you either manually or through a Tier 2 tracking portal. Encourage your primes to identify additional opportunities for diverse suppliers within their own organization and report Tier 2 spend.

Growing a robust supplier diversity program takes time, but it does not have to be time-consuming. Look at what your organization has already established, then achieve quick, but meaningful, wins with by building on that foundation.

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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.