CVM’s comprehensive 2017 State of Supplier Diversity Report—Supplier Diversity Programs scrutinized issues and processes faced daily by supplier diversity programs of all sizes, from multiple industries. One topic CVM asked about was supplier development; our survey found that 35 percent of respondents have a formal development program. Another 24 percent of respondents said they engage with informal supplier development efforts.
Is your supplier diversity program among the 41 percent without any development initiative, formal or informal? Taking a step into supplier development can offer a range of benefits for your organization, as well as your suppliers and the communities where they operate. These are some considerations as you ponder whether it’s time for a supplier development program:
Is Your Supplier Diversity Program Strong?
Perhaps you have reservations about the idea of supplier development because you are already waist-deep into maximizing your supplier diversity program; you believe that you have no time for anything beyond it. Although striving for improvement and additional success is always important, a moderately strong supplier diversity program allows for a development strategy as well. Moreover, dedicated supplier diversity software can deliver many benefits (thus freeing up time for your program) that can be subsequently devoted to development. Be realistic with the strength of your supplier diversity program, but give yourself some credit where credit is due.
Supplier Success Is Your Success
Developing suppliers puts them into position for improvement and additional success. Look for diverse suppliers that can strengthen their business processes and profit margins, become certified with appropriate agencies, and cement themselves as trusted partners within your supply chain. These suppliers can benefit not only your diversity program, but also your company’s bottom line. Supplier development ultimately increases diverse spending and reduces the amount of time spent seeking new suppliers, because most of those signing a contract with your organization aren’t going anywhere. In this way, supplier development leads to more organizational success, and organizational success leads to more supplier development …
Supplier development must be more than a stated declaration and a few phone calls; this approach often leads to little or no development. Clearly defined goals—whether they are found in key performance indicators (KPIs) or something a little (but not much) more abstract—offer ways to determine if development is proceeding as hoped. Goals also show where any speed bumps are occurring. You might not be able to peg an exact ROI to your KPIs, but you can take away data and observations to show to executives that supplier development has been worth the effort.
Seek Expert Help
If you have the means to launch a formal or informal supplier development initiative, you don’t have to figure it out on your own. Supplier diversity experts that guide your diversity program’s success can also raise your development program off the ground. More pointedly, the aforementioned supplier diversity software can provide a big development boost. Not every supplier is a good candidate for development—the best supplier diversity solutions keep your diverse supplier roster updated, identify areas of diversity primed for development, and, of course, save time.
The first steps of supplier development might be the trickiest to take. Once you take those steps, though, everything that follows becomes easier and builds upon itself - just like riding a bike. If your program is ready, your suppliers will welcome the opportunity to strengthen their partnerships with your organization.
Do you currently have a formal or informal supplier development program? If not, have you thought about developing one?