Supplier Diversity For Dummies. Kathey K. Porter
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work properly. Some of the items are required for it to work at all. It may still technically function without some of the others, but if it doesn’t work the way you’d hoped, it’s nothing more than a useless heap of scrap metal which has no value to you. The same goes for a supplier diversity program; sure, you can technically run it without all the pieces, but it isn’t as effective.
Perusing Supplier Diversity Management as a Process
In the chapter introduction, I mention clients’ a-ha moments when they first hear about supplier diversity management as a process. Well, here’s what happens after the light bulb comes on: We usually have a conversation about the gaps in their programs and whether the gaps are intentional or unintentional. If they’re unintentional, it may be because the organizations weren’t aware that this process was something they needed. If the gaps are intentional, it’s usually because the supplier diversity people haven’t been able to get buy-in from the top to incorporate all the phases into their program. Either way, whether it’s increasing knowledge or developing tactics to secure buy-in, there’s a solution.
As supplier diversity has evolved over the years, the outcomes organizations have required to justify their programs have also shifted. During each phase, they adopted new tactics or measures in response to what was important to the organization at that time. (You can read more about the phases of supplier diversity history in Chapter 2.) Today, supplier diversity is a management strategy, and the outcome is delivering value to the organization.
Organizations that evolved successfully became synonymous with best practices. They’re often comprehensive programs, incorporating activities (whether that’s internal policies and in-reach or external outreach, accountability, and supplier development) in each step of the process. As I discuss in the preceding section, that comprehensiveness is a hallmark of SDM.
Conversely, programs that aren’t so successful usually include only one aspect of the process. For example, they may have an internal policy but no external outreach, communication, or supplier development plan. This setup may limit the number of small and diverse businesses that engage in their program or their contract readiness for contract opportunities with the organization. Another company may have a heavy focus on supplier development and conducting workshops but not have policies strong enough to be impactful or inclusive or a clear process to connect businesses to opportunities.
A process is a series of actions or steps taken to achieve a particular end. Consider the process involved in running a bakery. It’s made up of a group of functions represented in a tiered plan, starting at the top. These tiers include all the functions needed to operate a bakery, such as production, marketing, HR, supply chain, and so on. You can break down the high-level processes that make up each function into more granular tasks.
For example, you can divide the production process into smaller sub-processes, such as preparing the batter, making the icing, adding toppings or designs, baking the cakes, and packing and shipping. Each of these sub-processes has its own sub-processes (all the ingredients needed, ideal storage conditions). You keep repeating these steps until you reach the lowest level of the process, or activities, to get a finalized and detailed plan of all the company’s processes.
The same principles make up the supplier diversity management model. When you’re working on one aspect, or something that you’re more comfortable with, focusing on just that one element and neglecting others is easy. But if you don’t realize the interconnectivity between each part, the process can be ineffective, inefficient, or both.
Figure 3-1 illustrates the supplier diversity management process.
Each of these functions is interconnected, and they work together to create a push and pull effect to reach the goal of creating value for the organization and the community. External community stakeholders have an interest in creating a strong small and diverse business community and can drive action. To do so, they may push organizations to ensure that small, diverse, and local business are able to compete and have opportunities to be considered for contract awards. They then pull information from these organizations to stay abreast of what’s happening and hold them accountable to comply.
FIGURE 3-1: The supplier diversity management process.
Organizations may create programs or adjust their program activities in response to this movement. They push information about their programs, upcoming opportunities, and results out to stakeholders, the small and diverse business community, and internal departments and senior leaders. After the program is in place, organizations work to develop small and diverse businesses so that departments are able to engage businesses that are ready and able to successfully perform on projects. The success of these businesses allows them to build sustainable businesses and remain viable contributors to the business community.
Introducing the Supplier Diversity Management (SDM) Model
Supplier diversity management focuses on building a full, holistic program that includes all the areas necessary — not just one or two aspects — to maximize benefits. The supplier diversity management (SDM) model is a guide that helps map out the key functions for any type of organization or agency looking to implement a full-scale supplier diversity program that achieves results and delivers value to the organization.
When you build a program that is in alignment with your organization’s goals and focuses — not just conducting activities or going through the motions but also adding value to the organization — guiding your actions toward meaningful activities becomes easier. The SDM model ensures that your internal and external activities and supplier development converge (see Figure 3-2), allowing you to deliver on this promise.
FIGURE 3-2: Supplier diversity interconnectivity.
Figure 3-3 illustrates how the SDM model works and how each aspect works together and complements the other.
FIGURE 3-3: Supplier diversity management model.
The internal process
Everything starts here. This part focuses on all your internal activities, your 4 P’s, your in-reach efforts, and your programs and determines the robustness of your program. It’s the heart of your supplier diversity efforts, but, like a human, your program needs more than a heart to function healthy and strong.
Many organizations have an “if we build it, they will come” approach, in that they think businesses will line up to do business with them if they create a program. In reality, the most qualified and capable firms are in high demand, especially in industries that don’t have many small or diverse businesses. These companies have the luxury of being very selective about who their partners are. They aren’t interested in processes that are cumbersome and unwelcoming, no matter who you are or how big your organization is. But entrepreneurship is alive and well. Every day, more people are deciding to pursue their dreams of owning a business. This boom creates many opportunities to show would-be entrepreneurs why you’re a good partner and that their next client is you.
The external process