Supplier Diversity: What’s In It For You?

Categories : Procurement Stages | Identify Suppliers Published on : Dec 20 2017

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!

More from Procurement Insider

  • Articles & Insights

Suppliers Need Water and Care

  • Identify Suppliers , Negotiate, Reduce Risk , Vendor Relationship Management, Supplier Relationship Management, Vendor Consolidation
  • Best Practices & Case Studies

Time to Implement a Supplier Diversity Program

  • Identify Suppliers , Implement & Measure, Set Strategy , Supplier Relationship Management, Supplier Diversity, Supplier Optimization
  • Best Practices & Case Studies

Has Your Organization Set Up a Supplier Development Program?

  • Identify Suppliers , Supplier Relationship Management, Supplier Optimization, Vendor Consolidation
  • Best Practices & Case Studies

4 Best Practices for Using Market Intelligence in the Sourcing Process

  • Identify Suppliers , Conduct RFP Strategy, Negotiate , Market Intelligence, Market Research, Category Management