Does your supplier diversity simply look good on paper, or is it a robust program that involves the collective effort of many? While most companies understand that a supplier diversity program will benefit their business, they often do not understand that the benefits they receive depend on the effort they make. A quality supplier diversity program requires honest analysis, solid planning, collective effort, outreach and training.
With just a few steps, you can develop a program for your business that successfully diversifies your supply chain and helps internal and external stakeholders understand the importance of investing in such an initiative. Businesses that make this effort will appreciate the competitive advantage that a comprehensive supplier diversity program offers.
Step 1: Conduct an internal and external analysis. Conduct a thorough and candid examination of the supplier diversity initiatives already in place. You can do this by:
???? Holding meetings or forums for internal stakeholders to have an open discussion about the supplier diversity initiatives;
???? Conducting an internal survey that asks participants to rate supplier diversity initiatives based on best-in-class guidelines: Do we have staff dedicated to diversity initiatives? Is supplier diversity part of the strategic sourcing process? Do we have a budget and resources to dedicate to this effort? Do we have executive level support?
???? Meeting with institutions outside your business to gauge the perception of your company in the marketplace. Speak with representatives from relevant groups or coalitions, such as the African American and Hispanic chambers of commerce or women business councils, to better understand the level of their involvement with your business in the past. Past and present suppliers can also provide you with insightful information. Lead discussions to find out what worked, what they liked about your business, etc. It is always important to maintain a positive perception of your business within the local community.
Take the information derived from these assessments and score responses accordingly. Be conservative in your rating. This will help you benchmark where your company stands on supplier diversity initiatives.
Step 2. Develop a strategy for long- and short-term goals. Based on the information provided during your initial research, you can now develop an analysis of your strengths, weaknesses and opportunities. This will provide a roadmap for the strategy of the overall program and help you to establish realistic goals, including long and short-term targets. Aside from the ultimate goal of systemic supply chain diversification, these goals should include increasing your visibility at a local level, gaining buy-in from key stakeholders and promoting your efforts both internally and externally. Guidelines are available through groups such as the National Minority Supplier Development Council (NMSDC). Be sure to establish a realistic timeline. Do not over promise, as this can risk your long-term objectives.
Step 3. Initiate outreach. Participating in the Women?s Business Enterprise National Council (WBENC), NMSDC and similar organizations can help to broaden the visibility of your company and assist with your supplier diversity goals. Research and attend meetings and events that might be relevant to your business and participate in committees or leadership activities to help you gain a better understanding of the collective challenges and goals of all members. Further your company?s visibility in the local community by attending conferences and fairs, where you can engage in meaningful conversations with suppliers and highlight the importance of working with minority and women-owned businesses.
Step 4. Seek assistance from an external consultant. External consultants provide thought leadership and training to the internal purchasing team. In some instances, purchasers or other important stakeholders within the company may not realize the importance of diversifying the supply chain. Using an independent third-party representative can help to break down misconceptions and build the business case for supplier diversity.?
If the resources are not available to hire an external consultant, communicate with colleagues outside your organization. Because everyone is working toward the same goal, supplier diversity representatives from companies in your local area may also be invaluable sources of information. Speak to a variety of individuals, including those with extensive experience and those who have worked for only a few years. Find out what type of resources and materials they have in place at their business. This research can provide you with valuable benchmarking data and resources for your efforts.
Step 5. Conduct a data scrub. In order to establish accurate benchmarks, you need accurate data. Capturing the spend throughout all departments within your organization is a necessary step in realizing goals and moving your organization forward. In addition, providing accurate spend information to purchasers from your organization goes a long way in establishing a baseline and impetus for growth.
Step 6. Develop an ongoing forum for dialogue. Once you start the program, it is important to maintain momentum and make sure that there is an ongoing effort to analyze, review and advance supplier diversity efforts. Establish councils or committees that regularly meet to discuss issues pertaining to supplier diversity. Representatives to these groups should include purchasers as well as stakeholders from all levels of the organization ? from presidents and senior leadership to the sales team and support personnel. This presents the ideal forum to learn more about new business projects or bidding opportunities on the horizon.
Step 7. Mentor and train suppliers. A mentoring program can further strengthen relationships with your suppliers, offering them resources and expertise they may not have. For example, smaller suppliers may not have the staff or resources for a marketing department. Teaming these suppliers with marketing executives on your team can lead to benefits that will help to drive long-term success for each organization.
Training courses are another effective way to support your suppliers. Invite suppliers to your business to attend classes led by executives on your team on strategic selling, marketing, accounting or other common business practices. Alternatively, leading sessions at minority and women business conferences or meetings can also be a method for sharing knowledge.
Step 8. Never be complacent. You can always find additional steps to further diversify your supply base or improve the businesses associated with it. From becoming actively involved with local diversity business groups to improving the business practices of your suppliers, you should continually look for ways to benefit the collective effort.
A solid supplier diversity program becomes part of your company?s language. Rather than a concept exclusively used in proposals, it is discussed in lunchrooms and in marketing meetings. You have visibility on a local level and businesses turn to you when they need information and insight on building a supplier diversity program. You have solid goals in place to grow your program and an outline for achieving those goals. From there, you must work to make the program better. This will give you a true step ahead of the competition.
Pamela Coleman-Brailsford is senior director, supplier diversity and sustainability, at Cintas Corp., www.cintas.com.