Supplier Diversity For Dummies. Kathey K. Porter
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as a driver of entrepreneurship and economic inclusion.
Business and program globalization
If you’re part of a global organization, I’m sure international business is an important aspect of your organization’s overall business. Whether looking to gain efficiencies or appeal to the local market, you may be tasked with extending your efforts, not just domestically but also internationally. A number of countries have aligned with leading U.S. groups to form their own programs focused on creating access to opportunities, including the following:
The Canadian Aboriginal and Minority Supplier Council
Minority Supplier Development in China
Minority Supplier Development UK (MSDUK)
Supply Nation (Australia)
The South African Supplier Diversity Council
Many international markets are at the early stages of business inclusion for diverse populations. Global supplier diversity not only helps local businesses where you may be operating but also provides another capacity-building opportunity by connecting domestic businesses to international opportunities.
Strategic advantage
Just as the demographics of the consumer markets are changing, so too is the makeup of the labor markets. Today’s employees are looking for more than just a job. They’re motivated by a higher cause and want to believe that the things they and their organizations do make society better.
Just a few short years ago, departments like sustainability; diversity, equity, and inclusion (DEI); and supplier diversity weren’t part of the traditional structure and weren’t always embraced. Now they’re an integral part of business operations and are prominently on display in communications, websites, annual reports, articles, and so on. Being able to make the business case and communicate program impact can be helpful for functions like recruiting, grant funding, or marketing, to name a few.
Economic imperative
The makeup of the U.S. population continues to become increasingly diverse. The U.S. Census Bureau indicates more than half of all Americans will identify as a part of a minority group by 2040. This shift is already impacting areas such as consumer markets. These groups are demanding access to employment and entrepreneurial opportunities and are using their voting power, or sometimes protesting, to influence change.
Chapter 3
Supplier Diversity Management: A New Way of Thinking
IN THIS CHAPTER
From organizations to entrepreneurs, supplier diversity is on everyone’s minds. For entrepreneurs, it’s knowing how to leverage supplier diversity to create business relationships, win contracts, and grow a sustainable business. For organizations, it’s developing an impactful program that brings value to the organization and the community. As each group tries to gain that understanding, supplier diversity has grown from a cursory academic construct to a viable management and entrepreneurship strategy and worthwhile organizational pursuit.
Whenever I begin working with a new client, I always like to get a sense of their current supplier diversity operation. Often, they explain their desire for a program. They have available opportunities and are performing the requisite activities, but they’re still not getting the results they want. After I hear about their challenges, I can always tell they’re still looking at supplier diversity as an initiative rather than as a process. They usually have one, maybe two aspects, but they’re missing another phase of the model that’s necessary to make their efforts work. When I begin to explain this component, I love it when the “a-ha” moment occurs. It’s like you can see the light bulb come on as their eyes light up.
In this chapter, I define and explain supplier diversity management, discuss supplier diversity management as a process, and introduce the supplier diversity management (SDM) model.
Defining Supplier Diversity Management
People often think of supplier diversity as an endless number of luncheons, breakfasts, and dinners (the chicken dinner circuit) with a few workshops thrown in. It’s easy to disparage these “chicken dinners,” but historically, prior to organizations like the National Minority Supplier Development Council, diverse business owners never had the opportunity to socialize with nondiverse business leaders. In the South, it was not only illegal — it could be deadly.
Yes, as part of the entrepreneurial ecosystem, supplier diversity professionals are very visible at community events such as these, and informational workshops make up a large part of supplier diversity programming, but those are just snapshots of everything involved in supplier diversity. Looking at the field collectively rather than the individual events provides a fuller picture of what it really entails.
Depending on the leadership, some view supplier diversity as an optional initiative and not a true management function. When you actually think about the myriad of activities involved in supplier diversity, it really is a system or process, one I call supplier diversity management (SDM).
Supplier diversity management involves many interconnected functions that are difficult to manage separately and expect worthwhile outcomes, such as the following:
Supplier development
Contract compliance
Creation of the 4 P’s (people, policies, processes, and procedures; see Chapter 6)
Project management
Stakeholder engagement and collaboration
Community relations
As organizations shift to build programs that are impactful and focus on adding value, they have to ensure that these functions are aligned and working together.
