Supplier Diversity For Dummies

Kathey K. Porter

• Publisher: For Dummies
• Year: 2022
• Print ISBN: 9781119843016
• eBook ISBN: 9781119843030
• Edition: 1
• Topic: Business
• Subtopic: Women in Business
• Index: Business

Extend the principles of diversity and inclusion to your company's suppliers

Many people are familiar with the importance of ensuring and advancing inclusion, equity, and diversity amongst their employees and managers. But do your efforts include supplier diversity—an equally as important and essential part of any holistic diversity effort?

In Supplier Diversity For Dummies, nationally recognized small business strategist and economic inclusion and supplier diversity expert Kathey Porter delivers an empowering and informative guide to implementing this integral part of any robust inclusion initiative: supplier diversity. You'll understand the relevance of supplier diversity and why it's important to encourage equal opportunity for diverse suppliers and businesses owned and managed by underrepresented groups.

In this book, you'll also find:

• The answers to your most pressing questions about how to build a coherent and sustainable supplier diversity program
• Ways to contribute more fully to your company's diversity and inclusion functions
• Strategies to position supplier diversity as a central function in your organization

Perfect for company buyers, purchasing and procurement professionals, material management executives, strategic souring professionals and supplier diversity practitioners, Supplier Diversity For Dummies is a must-read resource for supply chain professionals, diversity and inclusion leaders and anyone looking to increase their proficiency in supplier diversity, improve supply chain inclusivity and increase their social impact.

Part 1

Getting Started with Supplier Diversity

IN THIS PART …

Examine the growing demand for supplier diversity.

Discover the basis and history of supplier diversity.

Explain supplier diversity management (SDM).

Recognize the differences between supplier diversity and diversity, equity, and inclusion (DEI).

Understand the supplier diversity structure within your organization.

Chapter 1

Understanding the Growing Demand for Supplier Diversity

IN THIS CHAPTER

Getting crystal clear on the nature of supplier diversity

Identifying the continued need for supplier diversity

Eyeing how external factors are changing the field

Exploring companies’ renewed investment in supplier diversity

Supplier diversity is a proactive business strategy that encourages buying from businesses that identify as belonging to a specific socioeconomic, historically disadvantaged, or underutilized demographic as suppliers, vendors, and contractors. The Small Business Administration, commonly called the SBA, classifies businesses in a number of categories. The most common are minority-owned or disadvantaged, women-owned, veteran-owned, and service-disabled-veteran owned. Corporations have expanded their definitions to also include LGBTQ to be more reflective of their local communities.

Supplier diversity has continued to progress from legislation to stabilize social unrest during the late 1960s to an economic imperative and a bona-fide management strategy. Supplier diversity programs recognize that when an organization buys products and services from suppliers that have been historically underutilized, it helps nurture and transform its own supply chain. Supplier diversity also gives organizations access to agile businesses with timely business solutions that allow them to gain a competitive advantage in the marketplace.

In this chapter, I cover what supplier diversity is (and isn’t) and why it’s still needed. I also identify some of the factors redefining supplier diversity and why organizations are recommitting to it.

Breaking Down What Supplier Diversity Is and Isn’t

Throughout my career as a supplier diversity professional, I’ve worked in a number of industries and have been housed in a variety of departments: economic development, procurement, business operations, and community relations. I’ve had a range of supervisors, including those who knew nothing about supplier diversity, which gave me the freedom and flexibility to do a number of things. I’ve had supervisors who thought they knew supplier diversity, which created an epic battle to execute anything. Then I had those who understood and embraced the mission, which led to a real group effort.

Organizations have any number of reasons why departments end up where they do on the org chart. Sometimes they make perfect sense, and sometimes — well, I’ll just say they don’t ask me for my input. Inevitably, where supplier diversity ends up says a lot about the value the organization places on it and determines how you’re able to behave in the role. Ultimately, this positioning affects what you’re doing and the results you’re able to deliver. For example, I’ve found myself involved in things that were really outside my scope, some that expanded my view of supplier diversity and how it touches the community.

Through my experience and my conversations with supplier diversity colleagues, I know that where supplier diversity sits in the organization must be intentional. It sets the tone for how the program operates; how it interfaces with others throughout the organization; how it establishes influence; how it carries out tasks; and how it interacts with the community, stakeholders, and senior leaders. Additionally, it unconsciously sways how others view the role, which can lead to confusion about what supplier diversity actually is. The following sections dive into the true functions of supplier diversity as well as those it doesn’t actually cover.

What it is

So, what exactly is supplier diversity? It’s

• A procurement function: Supplier diversity ensures that any business has an opportunity to do business with the organization regardless of race, gender, sexual orientation, and so on. It does so by developing policies, processes, and procedures that make the procurement process inclusive, fair, and equitable.
• A business and management strategy: Supplier diversity is a strategy that supports the economic development of diverse communities who are customers and consumers by giving them opportunities to sell to the organization. It’s a management strategy that allows organizations to progressively transform a company’s supply chain and gain a competitive advantage by doing business with diverse businesses.
• An economic driver and entrepreneurial resource: Supplier diversity provides support, education, and mentorship to small and diverse businesses. When an economic gap exists, whether through lack of work prospects or access to business opportunities, the entire community suffers. This scenario creates a drag on social services and leads to the overuse of other community resources. Organizations, especially those that are large economic engines in the community, have a duty to look at their resources, step in, and create solutions. The access to resources supplier diversity gives entrepreneurs helps drive business growth and create economic stability for the entire community.

What it’s not

Here’s what supplier diversity isn’t:

• A diversity and inclusion/HR function: Supplier diversity doesn’t focus on hiring and retaining a diverse workforce, creating employee resource groups, or cultivating an inclusive work culture (I discuss this difference in greater detail in Chapter 4).
• A philanthropic function: As a procurement and business function, supplier diversity doesn’t award contracts or enter into contractual agreements with businesses based on need or hardship. It involves a competitive process that businesses must be qualified for and able to perform.
• An external community relations or PR function: Yes, supplier diversity is community-facing thanks to its close relationship with the small and diverse business community, but it’s not a “voice” of the entire organization, nor does it act as a general spokesperson for all things happening.
• A set-aside or affirmative action program: Supplier diversity creates a pathway for small and diverse businesses to get a foot in the door. It encourages the utilization of small and diverse vendors but doesn’t “set aside” contracts for one particular group or advocate that contracts be awarded based solely on how businesses may identify. Remember: This distinction is especially relevant in the public sector, where public dollars are being spent. In fact, the federal government is the only entity that can legally set aside contracts for vendors based on their identification as part of a specific socioeconomic demographic.
• A catchall for other functions: Supplier diversity isn’t a job description that captures multiple, traditionally stand-alone functions into one position, and it’s not an add-on “get to it when you have time” job.

Although supplier diversity is a frequent collaborator with many departments and relies on internal relationships to advance its mission, keeping these points in mind helps programs avoid spending time on tasks that aren’t productive or don’t always contribute to the set goals. For example, although production and marketing often work together, having someone from production make marketing decisions for the organization may not be a good idea.

Investigating Whether Supplier Diversity Is Still Necessary

Every few years, this question pops up for debate as society (and a few detractors) try to move beyond the conversation of race- and gender-based initiatives and quotas and focus solely on qualifications, merit, and so on. The assumption is that the legislation, hours of training, and countless programs people have endured over the years have done their jobs. Now, everyone has equal access to anything they choose: jobs, housing, healthcare, business, you name it. This argument implies that the playing field is now equal and fair and assumes that humans no longer harbor implicit biases, prejudices, or favoritisms. If this description sounds like your organization, congratulations — you did it! If not, keep reading.

As Chapter 2 explains, the motives behind supplier diversity have shifted from complying with federal law (we have to) to doing the right thing (we want to) to creating a business case (we need to). Arguably, these shifts likely came because someone brought up the question of whether it was still necessary.

The United States has definitely come a long way since the affirmative action legislation of the 1960s, but any progress that’s been made validates that these types of initiatives work and that there’s really no such thing as “we’ve made it.” If anyone working in diversity will tell you one thing, it’s that supplier diversity isn’t a destination but rather a continual process that requires a long-term commitment to change.

One argument in favor of the ongoing need for supplier diversity is the continued economic disparity that exists between diverse business owners and non-diverse business owners, whether it’s lack of access to capital or networks, lack of resources, or any other number of issues that derail business growth.

Take, for example, the impact the COVID-19 pandemic has had on diverse businesses. Of course, entrepreneurs across the board took a tremendous beating, but COVID-19’s effect on minority-owned small businesses in the United States was much more ...

Table of contents

• Cover
• Title Page
• Table of Contents
• Introduction
• Part 1: Getting Started with Supplier Diversity
• Part 2: Developing Internal (Organizational) Supplier Diversity Efforts
• Part 3: Supplier Development and Supplier Diversity
• Part 4: Examining External (Community) Supplier Diversity Efforts
• Part 5: Using Technology and Compliance to Enhance Supplier Diversity
• Part 6: Building a Career in Supplier Diversity
• Part 7: The Part of Tens
• Index
• About the Author
• Advertisement Page
• Connect with Dummies
• End User License Agreement