One of the key acknowledgments of our supplier diversity programs is that there is a pool of suppliers out there full of untapped potential because they do not have access to the same opportunities that their majority-owned counterparts do. Five decades of work toward equality and equity for United States-based diverse suppliers is paying off, allowing us to focus on an even bigger picture: global supplier diversity and the enormous potential of diverse suppliers outside the U.S.
Our 2019 survey of supplier diversity programs revealed an overall shift in favor of global supplier diversity, with 29 percent of respondents indicating that they have a global program, for an increase of 6 percent over 2018. Even more telling is that 44 percent of respondents said they are planning to expand their supplier diversity programs to include the global procurement process. This represents a significant 16 percent increase over our 2018 survey, indicating rising awareness of the importance of global supplier diversity.
Of course, we can’t simply transplant U.S. supplier diversity programs to other countries and expect them to succeed. Just as there is a proven model for corporations to enter a new market geographically, the supplier diversity leader must understand the context of the environment, the opportunity, and the risks before setting a strategy.
The Business Case for Global Supplier Diversity
After more than 50 years of supplier diversity, we know that partnering with diverse suppliers gives us access to innovative thinking and creating. These suppliers contribute to a robust, streamlined supply chain that helps us stay competitive and forward-thinking in the global marketplace. Why limit those benefits to U.S. diverse suppliers?
“If you are not sourcing inclusively everywhere you do business, you do not have full access to critical innovations and the best total value options that will help you meet and anticipate the needs of your clients,” says WEConnect International President, CEO and Co-Founder Elizabeth A. Vazquez.
If your company sources products and services from beyond the nation’s borders, but you aren’t also actively identifying and working with diverse suppliers in other countries, what are you missing out on? What potential are you leaving on the table?
Joan Kerr, director of supplier diversity and sustainability at Pacific Gas & Electric, puts it this way: “Corporations should be sourcing inclusively wherever they procure, produce, market, or sell goods and services. Corporations should focus on global supplier diversity and inclusion as a business strategy rather than just an altruistic activity. While global supplier diversity and inclusion is going to lift up the lives of many, it can also help corporations lower costs, generate revenue, and build good local government and community relations.”
Global Supplier Diversity Benefits U.S. Diverse Businesses
In addition to accessing new suppliers with new innovations and solutions, global supplier diversity benefits U.S.-based diverse businesses by providing opportunities for them to expand globally. Corporations with global supplier diversity programs can serve as a model and an incubator for successful diverse suppliers that are ready to break into the global marketplace.
“Through providing equal access to procurement opportunities for underutilized communities and promoting supplier diversity models as a way to grow economic opportunities overseas, we will not only help to drive economic growth abroad, [but] we [will also] ignite a growth engine for diverse businesses in [the] U.S. that have a desire to expand overseas to mirror our global sourcing strategy,” says Ying McGuire, senior manager of global supplier diversity at Dell Inc. “In other words, our diverse suppliers who have done well domestically will have even more opportunities by working with us to take their business global.”
Your Corporate Values Reach Beyond Borders
Successful supplier diversity programs are successful because they align with corporate values. From the top down, the entire enterprise is invested in developing an inclusive procurement process and incorporating diverse suppliers at every level. So why wouldn’t that value system extend to global suppliers? It’s disingenuous to practice supplier diversity at home and not abroad. Just as consumers speak with their wallets, whom a company spends money with is one of the most telling indicators of its corporate priorities.
That’s not to say that your global supplier diversity program must be at the same level, producing the same results as your domestic program. Given the state of supplier diversity in other countries, it’s likely that your global supplier diversity program will be several steps behind. But if your company claims supplier diversity as part of your corporate values, and you procure goods and services outside our national borders, then a global program is a necessity.
With hundreds of thousands of diverse suppliers operating outside the U.S., the opportunity to expand and evolve your supplier diversity program is real. But where do you get started in implementing a global supplier diversity program? The best place to begin is with the tools you already know and love, such as CVM’s Explorer Tool, which enables program managers to search thousands of suppliers across the globe. Don’t worry: CVM has experts ready to help you expand your supplier diversity program on a global scale. Global supplier diversity is the next frontier; are you ready to reap the benefits?