If you’re looking for a way to boost your company’s revenue opportunities, you may want to consider creating a supplier diversity program.Working with certified minority- or woman-owned businesses may qualify your business for government contracts that favor or require diversity. Because these programs tend to highlight smaller companies, you will often experience superior, more personalized service. You also will be contributing to the growth of the local economy.
Here are 7 guidelines to follow.
#1: Define Your Program and Create a Policy
Determine where you want your supplier diversity program to focus:
- Businesses owned by women,
- Specific racial and ethnic groups,
- People with disabilities,
- Or small or disadvantaged businesses.
Then create a supplier diversity policy statement that defines these groups so people know what to look for and how to evaluate suppliers. Your policy should your standard operating procedure and non-negotiable.
#2: Secure Commitment from the Top Down
Among the Diversity Inc. Top Ten Companies for Supplier Diversity, all:
- Have CEOs who personally sign off on supplier-diversity goals and metrics, compared with 86 percent of Diversity Inc. Top 50 companies;
- Audit their supplier-diversity numbers;
- Mandate that each request for proposal, RFP, includes supplier-diversity metrics.
To strengthen commitment, ensure the head of your supplier diversity program is senior management level or above, and has control over corporate purchasing.
# 3: Make Executives Accountable
Connect supplier diversity goals to the compensation and performance plans of senior management. Consider setting goals that differ for each business system or unit based on size and then incentives, initiating bonuses for performance against those supplier-diversity points which should be reported at least quarterly, and regularly. Create a scorecard that places appropriate weights as it relates to different vendors so decision makers can measure the benefits of selecting them.
#4: Develop and Identify Opportunities for Supplier Diversity
Supplier diversity development should be formally integrated into your corporation’s sourcing strategy process. Set goals for the supplier selection process so diversity suppliers are included. Be proactive in developing diversity suppliers for underutilized product, service, and commodity areas, insuring that the supplier screening process is fair and consistent.
#5: Leverage Business Networks to Find New Diverse Suppliers
Create a comprehensive database of minority-owned businesses. This requires a substantial amount of time and effort. Business networks like the National Minority Supplier Development Council can help you with this. They can help you find and evaluate certified Minority Business Enterprise suppliers, such as DPV Transportation Worldwide, who specializes in business travel and ground transportation.
#6: Integrate Supplier Diversity Through Your Organization
Consider implementing a “champion” program so that you have enterprise-wide commodity champions with significant supplier-diversity commitments. They raise awareness, keep their finger on opportunity, serve as your company liaisons with stakeholders, and assist with your diverse targets. You can also create a “supplier diversity 101” program for all employees that will answer basic questions such as, “What is the value of supplier diversity? What’s the business case? And why is it important to our business?”
#7: Establish a Continuous Improvement Plan
You must conduct internal audits annually to verify if current activities and results align with your company policy, plans and expectations, as well as regulation changes. Be certain to conduct surveys with key internal stakeholders to see if your company’s current program is meeting or even exceeding their expectations. You can also create a program to facilitate ongoing communication between your company, MBEs and other pertinent minority groups.