Why your company may need a supplier diversity program
- Competitive edge
- Community engagement
- Company culture and brand fusion
Having a diverse supply chain provides an advantage when competing for projects. Many state, federal, and large company procurement strategies encourage the award of contracts in a way that strengthens and increases business opportunities for Minority Business Enterprises (MBEs), Women Business Enterprises (WBEs), Service-Disabled Veteran Business Enterprises (SDVOBEs), Veteran Business Enterprises (VBEs), Lesbian, Gay, Bisexual, and Transgender Business Enterprises (LGBTBEs), and Disability-Owned Business Enterprises (DOBEs).
In addition, inclusive procurement strategies expand the number of potential vendors and increase competition. This increases the overall efficiency of the supply chain and can help reduce costs and increase product quality.
The flexibility of a diverse supplier base is another reason why diversity is so important. According to Coca-Cola, “Diverse suppliers can turn on a dime and are now considered for contracts that they would not have been otherwise due to the imperative for flexibility. They have proven themselves to be agile in terms of responsiveness.”
Finally, having a diverse supply chain makes employees and customers feel good about the company. According to the Harvard Business Review, the “feel-good” factor associated with diversity can help your brand. A 2019 study for Coca-Cola found that individuals who were aware of Coca-Cola’s supplier diversity initiatives were 45% more likely to perceive the brand as valuing diversity, 25% more likely to think favorably about the brand, and 49% more likely to use Coca-Cola products. As a result, the study estimated that Coca-Cola gained 670,000 consumers using the company’s products more frequently.
The bottom line is that having a diverse supply chain and a successful supplier diversity program makes business sense.