By: ProcurementIQ Staff Writer, Kiera Outlaw
Procurement departments have thrown around the term ‘supplier diversity’ for years now. While companies contracting with the Federal government must have a supplier diversity mandate, procurement professionals outside of the government realm are coming to realize the significant benefits of supplier diversity. The problem, however, lies in getting all internal stakeholders on board and convincing them of the benefits. With that in mind, here’s what you need to know:
Supplier Diversity and The Bottom Line
Simply put, supplier diversity aims to create an inclusive supply chain comprised of diverse vendors, such as women-, minority-, and veteran-owned businesses. A common misconception about creating a supplier diversity program is that it’s expensive. The reality? A diverse supply chain not only benefits those small businesses, it also makes good financial sense for the company mandating the program. According to a 2015 study by The Hackett Group, “on average, supplier diversity programs add $3.6 million to the bottom line for every $1 million in procurement operational costs.”
That’s just one reason why supplier diversity matters … there are many more!