A Supplier Diversity Procurement Program reaches out to groups not traditionally included in the supply chain or within the purchasing process of corporations. Some of these underrepresented groups include women, visible minorities, aboriginals, LGBT+, Veterans, and people with disabilities who own and operate their own businesses. Aside from diversity in employment, supply chain diversity is one of the most effective ways to see tangible results from DE&I efforts.
These six steps will help you get started in creating your own Supplier Diversity Procurement Program.
Step 1 – Capture Corporate Support
We’ve found that every successful Supplier Diversity initiative or program has had one champion at the top end of organisational hierarchies. An individual at the VP, Director, or C-Suite level can garner the necessary support and make real progress on achieving tangible results.
That individual can often gain corporate support easily by explaining the ethical and financial rationale.
Doing good business means using a company’s resources and influence to positively impact the people and communities that support it. Part of that includes building supply chains that reflect the diversity of our societies and awarding contracts to entrepreneurs whose success has significant ripple effects.
It’s also in the best interest of private and public organisations to leverage the unique skill sets diverse entrepreneurs have. Being part of disadvantaged groups means those individuals have had to overcome greater barriers to get to where they are today. Along the way, they’ve cultivated a resiliency and creativity that translates into innovative ideas and execution.
Step 2 – Engage All Employees
After corporate support is established, employees at all levels of the organisation need to be on board. Impactful DE&I initiatives occur when the culture promotes it, not just the c-suite.
Speak to your employees about supplier diversity as early in this process as possible. Education on why it’s important to the business, society, and the entrepreneurs themselves can go a long way in garnering bottom-up support.
Education can include personal stories about diverse business owners and their successes, or the use of third-party organisations like the IWSCC or diversity consultants to host learning sessions.
Going a step further, giving employees the chance to reach out to their own networks and encourage inclusion in the organisation’s supply chain is a great way to make everyone feel included in the process.
Step 3 – Assess Existing Supply Chain
The next step is understanding the current make-up of your supply chain. It can be as simple as sending out a survey to vendors asking them whether they are 51%+ diverse-owned and operated, what goods or services they provide, and whether they are certified by one or more of these organisations: IWSCC, WBE, CAMSC, CGLCC, CCAB, or WeConnect Canada.
From here you can find out what you are currently spending with diverse suppliers, and where you can enhance the business they are already doing with you. This will also provide good insight on what goals should be set for diverse spend.
Step 4 – Create a Tracking System & Set Targets
Peter Drucker famously said, “what gets measured gets managed.” In order to meet any goals, a tracking system for diverse spend with quantitative metrics is a must.
Things you’ll want to keep track of are the number of diverse suppliers you work with, whether they are certified, what diverse group they belong to, how much you spend with them, what categories they supply to, and how long they’ve been a vendor. This can all be done through a simple spreadsheet before deciding to invest in tracking software.
After assessing the existing supply chain and creating a tracking system, goals can be set. A few examples are:
- At least XX% of invitations for RFPs go to diverse suppliers
- Spending $XX on diverse business contracts every year
- Ensuring that at least one vendor in each category is diverse
Step 5 – Update Supply Chain Management Policies
The fifth step is creating a formal policy. After stakeholders are on the same page and real data has been collected, the champions of this initiative will have a deeper understanding of what a successful procurement program will look like. Rather than including unreasonable asks, this policy should be based on the reality of the organisation’s collective agreement and budget for procurement.
This policy should be very clear and avoid corporate speak. It can essentially put into words the goals, tracking system rules, accountability, timelines, and parameters for analysing the data. While writing it, keep in mind the barriers diverse suppliers might face when submitting proposals. Addressing this beforehand will make the RFP process more inclusive.
Step 6 – Look for Diverse Supplier Opportunities
With a policy in place, DE&I leaders can start to identify opportunities to include certified suppliers in their supply chain.
Certifying bodies like the ones listed above will have up-to-date lists of diverse businesses, including the goods and services they offer as well as other crucial vetting data. Another way to find diverse suppliers is to attend networking events across the country. The Supplier Diversity Alliance of Canada is a great resource for supplier diversity event dates.
Step 7 – Extend the Impact Beyond Your Own Supply Chain
After creating your own “Tier 1” supplier diversity procurement program, you can start thinking about Tier 2. While Tier 1 relates to the vendors you engage with directly, Tier 2 refers to the vendors of your vendors. For example, if ABC Company supplies you with marketing swag, and XYZ Company ships t-shirts to ABC Company, XYZ company would be a Tier 2 supplier.
Tier 2 diverse suppliers count towards your diverse spend, so encouraging your vendors to engage with diverse suppliers is mutually beneficial. This ripple effect ensures that supply chains across the country are diversifying.
Need Help?
Reach out to a certifying council to get help setting up a formal Supplier Diversity Procurement Program. We can assist in creating the policy language, tracking system and much more!
