Supplier Diversity Best Practices – Part 2

By Akiva Lewis

Once the organization understands the role of supplier diversity and is committed to making it successful, the organization must find and start contracting with M/WBE suppliers.  To do this, each organization must develop specific criteria for determining what constitutes a diverse supplier.  You can’t measure it if you don’t know what it is.  Therefore, it is critical for an organization to clearly define the process for identifying and verifying companies that qualify as underrepresented.  Now the procurement department must proactively seek out companies that meet their criteria for supplier diversity and start doing business with them.  However, it is also important to help current suppliers understand and comply with the new supplier diversity program.  Perhaps they can qualify for the program or make a connection with suppliers that meet the criteria. 

The fourth step in the process is actually on ongoing concern– running the supplier diversity program.  To be successful, this involves the coordination of multiple parties in the organization including procurement, contracts, program managers, and senior leadership.  Relationships have to be continuously formed with new suppliers and reinforced with existing suppliers.  In addition, there are several things an organization can do to support their supplier diversity efforts.  These include:

bulletDevelop and Collect a Supplier Diversity Qualification Survey
bulletProduce and Distribute a Minority Business Brochure
bulletAttend Business Opportunity Fairs in Local Communities
bulletParticipate in Minority Business Professional Organizations
bulletCreate Business Directory to Connect M/WBEs with Individual Customer Users
bulletOutline Roles of Supplier Diversity Program Management

Of course there are many other things that organizations can do to effectively run a supplier diversity program.  These are some of the best practices that are working today in leading companies. 

The final piece of a supplier diversity program is the ongoing development of the program and underrepresented suppliers.  By nurturing the success of suppliers, an organization can ensure the continual supply of goods and services as well as the trust and confidence of vendors, customers, employees, and shareholders.  The following are some development programs that an organization might consider:

bulletConsulting services
bulletFavorable Financial Terms
bulletRecognize and Reward Participating M/WBE Suppliers
bulletHosting Trade Fairs for M/WBEs and Procurement
bulletConduct Site Visits for M/WBEs, Including Detailed Interviews Covering Operations and Management
bulletConduct Seminars for M/WBEs to Learn How to do Business with your company
bulletProvide Technical and Managerial Assistance to M/WBEs
bulletEmphasize Importance of Second Tier M/WBEs

Organizations are constantly looking for ways to gain a competitive advantage over their competitors.  Supplier diversity can lead to cutting costs, promoting innovation, and connecting with customers.  However, as more and more companies incorporate supplier diversity programs, supplier diversity no longer becomes a source of competitive advantage.  Rather it is a competitive imperative.  The five steps outlined in this article are the foundations for a successful supplier diversity program that will help companies meet the challenges of the 21st century.