Fortune 500 companies, which represent many of the world’s largest companies, know the value of establishing a supplier diversity program. Here is some of what they know about supplier diversity:
- It is good for business as Fortune-level companies seek to reach increasingly diverse consumer bases.
- Bringing diverse suppliers into their supply chains helps satisfy governmental regulatory requirements.
- Engaging small, diverse suppliers assists with innovation and brings new ideas into the company.
The Institute for Supply Management, an organization that represents supply management organizations worldwide, including those of Fortune companies, reported in a 2011 Supplier Diversity Survey that approximately 60 percent of respondents said they established such programs because “our customers are diverse, so we need to be too.” Only the category of federal reporting requirements drew a slightly greater response (61 percent).
CAPS Research, an academic supply chain research organization based at the W.P. Carey School of Business at Arizona State University, reports that 41 percent of respondents to a 2015 survey said they increased their numbers of diverse suppliers in their supply chains between 2012 and 2014.
Foster Untold Goodwill
Fortune companies also know that working with diverse suppliers can foster untold goodwill for the company. A woman-owned firm, Clerestory Consulting, a 13-year-old business in Evanston, Ill., recently credited in the news a Fortune company with “helping us grow in both size and sophistication.”
That laudatory quote came from the firm’s founding principal and managing partner Linda Toops, who spoke about her firm’s relationship with Allstate Insurance Co., a Fortune 100 firm as one of of America's Top Corporations for Women's Business Enterprises. Allstate’s recognition comes from the Women's Business Enterprise National Council (WBENC), whose award honors corporations for their supplier diversity programs.
Allstate’s senior vice president of sourcing and procurement solutions noted in a press release her company’s commitment to building diversity within its supply chain. Included in Allstate’s efforts at achieving supply-chain diversity excellence is an annual Supplier Diversity Exchange, which showcases diverse companies.
Another owner of a woman-owned firm, Gay Gaddis, founder and chief executive officer of T3, a full-service advertising and digital strategy agency, said of Allstate: “We attended Allstate's Supplier Diversity Exchange for the first time in 2011. Within a week, we had the opportunity to respond to an Allstate RFP. To date, we've worked with more than nine business lines and 40 clients within Allstate and created beautiful, award-winning work. Our relationship with Allstate is another example of how T3 can scale our business to meet growing client needs.”
Fortune 500s Must Lead the Way
In today’s fast changing global environment, companies must be forward thinking about how they do business. Fortune 500 firms are no different, and many find themselves leading the way, developing fruitful and sustainable relationships with diverse firms. Diverse populations are increasingly sophisticated with rising purchasing power and economic activities in their communities. Successful corporations are stepping up to meet these new consumers through supplier diversity.
Supplier diversity initiatives are being linked to a company’s business goals at an increasing rate. As Fortune companies know – with many of them having dedicated supplier diversity business professionals on staff operating standalone programs – supplier diversity can be a tool to drive market value, enhanced market presence, new product development and strategic sourcing.
The Fortunes get this.