Supplier diversity is the practice of sourcing goods and services from a diverse range of suppliers, such as women-owned, minority-owned, veteran-owned, LGBTQ+-owned and disabled-owned businesses. Supplier diversity is not only a moral duty and a social responsibility, but also a strategic advantage for businesses that want to thrive in a competitive and dynamic market. However, supplier diversity doesn’t work when the buyers working for the Fortune 500 lack diversity themselves. In this essay, I will argue that the lack of diversity among buyers hinders supplier diversity efforts and prevents businesses from reaping its benefits. I will also suggest some ways to diversify the procurement department and increase its engagement with diverse suppliers.
One of the main obstacles to supplier diversity is the lack of diversity among buyers working for the Fortune 500 companies. Buyers are the ones who make decisions about which suppliers to work with and how much to spend on them. However, according to a recent survey by Deloitte and The Alliance for Board Diversity, only 38.3% of Fortune 500 board seats were held by women and minorities in 2020. Moreover, only 18 Fortune 500 companies provided a detailed breakdown of their U.S. workforce by race and ethnicity in 2020. This suggests that buyers are predominantly white and male, which may affect their perception and evaluation of diverse suppliers. For example, buyers may have implicit biases that favor suppliers who share their background or culture, or they may have stereotypes that undermine the credibility or quality of diverse suppliers. As a result, buyers may miss out on opportunities to work with diverse suppliers who can offer innovative solutions, competitive prices, and high-quality products.
On the other hand, supplier diversity can bring many benefits to businesses that embrace it. According to various sources, some of the benefits of supplier diversity include: discovering innovation, being equitable and inclusive, driving competition, supporting local businesses, and opening new markets. For instance, diverse suppliers can offer innovative solutions that reflect their unique perspectives and experiences. They can also help businesses reach new customers who value diversity and social responsibility. Moreover, diverse suppliers can increase the quality and lower the costs of products and services by creating a more competitive supply base. Therefore, supplier diversity is not only a moral duty and a social responsibility but also a strategic advantage for businesses that want to thrive in a competitive and dynamic market.
In conclusion, supplier diversity is a valuable practice that can benefit both businesses and society. However, supplier diversity doesn’t work when the buyers working for the Fortune 500 lack diversity themselves. The lack of diversity among buyers hinders supplier diversity efforts and prevents businesses from reaping its benefits. To overcome this obstacle, businesses need to diversify their procurement department and increase their engagement with diverse suppliers. By doing so, they can foster innovation, equity, inclusion, competition, and growth in their supply chain and beyond. Therefore, I urge you to take action and support supplier diversity initiatives in your organization and community. Together, we can make a difference.