Supplier diversity refers to the practice of actively seeking out and working with a diverse range of suppliers to expand the organization’s supplier base and network, including with those vendor organizations owned by minorities, women, veterans, and other underrepresented groups. By implementing supplier diversity programs, companies can increase opportunities for small and diverse businesses, promote innovation and competition, and improve social and economic outcomes for marginalized communities. 

Supplier diversity programmes involve actively seeking and collaborating with a diverse range of suppliers, including those owned by minorities, women, veterans, and other underrepresented groups, to expand the organization's supplier base and network. By incorporating supplier diversity into their operations, companies can amplify opportunities for small and diverse businesses, foster innovation and competition, and drive positive social and economic outcomes for marginalized communities.

One of the key ways to improve supplier diversity in procurement is to set specific goals and targets. According to a report by the National Minority Supplier Development Council (NMSDC), companies that set specific supplier diversity goals and track progress towards achieving them are more likely to make progress in increasing diversity among their supplier base. 

Another way to improve supplier diversity in procurement is to create a supplier diversity program that includes education, outreach, and networking opportunities. A case study by Accenture found that a large telecommunications company was able to improve its supplier diversity by creating a dedicated supplier diversity program that included education, outreach, and networking opportunities. This led to a 20% increase in the number of diverse suppliers working with the company. 

Companies can also improve supplier diversity by using diverse suppliers in their supply chain. For example, a study by Deloitte found that companies with a diverse supply chain are more likely to have better supplier relationships and increased innovation. Organizations that effectively leveraged supplier diversity and dedicated supplier diversity programs respectively report 10% and 20% increases in the number of diverse suppliers working with the company and increased innovation in the products and services they offer. 

Overall, it is clear that supplier diversity is an important aspect of procurement. To improve supplier diversity in procurement, companies should set specific goals and targets, create a supplier diversity program that includes education, outreach, and networking opportunities, and use diverse suppliers in their supply chain. This will help to increase opportunities for small and diverse businesses, promote innovation and competition, and improve social and economic outcomes for marginalized communities. 

Overall, it is evident that supplier diversity plays a crucial role in procurement. To enhance supplier diversity in procurement, companies should establish specific goals and targets, develop a comprehensive supplier diversity programme encompassing education, outreach, and networking opportunities, and actively engage diverse suppliers within their supply chain. By doing so, companies can expand opportunities for small and diverse businesses, foster innovation and competition, and contribute to improved social and economic outcomes for marginalized communities.

FactWise Source-to-Pay helps you obtain holistic supplier performance metrics and discover diverse, verified suppliers to negotiate win-win outcomes, design and run robust, effective supplier management programs, and reduce supplier risk via supplier diversity.