The Biggest Problem Facing Supplier Diversity Programs And How To Overcome It

  • Feb 14, 2024

 

Today’s business landscape is ever-changing and fast-paced, and to stay competitive, it requires novel approaches and initiatives geared towards expanding your customer base and growing brand loyalty. One of the biggest trends in business is the growth of supplier diversity programs, and it’s not hard to understand why. 

 

According to the MIT Sloan Management Review, more than 85% of Fortune 500 companies have a supplier diversity program. Supplier diversity programs target small businesses owned by minorities, veterans, the LGBTQ+ community, women, and people with disabilities, to provide opportunities to these organizations. The results of these programs have been extremely beneficial for both the diverse suppliers and for the organization. Customers are 3 times more likely to purchase from a brand they perceive to be inclusive and diverse and programs that assist and grow small businesses owned by diverse suppliers increase brand loyalty in an underserved group and expand market share.

 

But, there is a major problem facing companies in their supplier diversity efforts. It’s a problem that often limits the effectiveness of the programs and makes them harder to execute. 

THE HEART OF THE PROBLEM

 

The problem of finding qualified suppliers is more difficult than it may seem. There are a couple of questions that need to be answered to simplify the process:

 

  1. Where do you find these organizations? 
  2. How do you know if a supplier desiring to work with your organization is actually “diverse?”
  3. What are their capabilities and capacity?

 

Not being able to answer these 3 questions sheds light on the struggles that organizations have with their supplier diversity programs. 

 

So, what is the solution?

 

FINDING QUALIFIED DIVERSE SUPPLIERS

 

Fortunately, there are some easy ways to overcome these challenges. One of the most effective ways to find diverse suppliers is to utilize one of the certification bodies that certify diverse suppliers. These organizations have a membership database of small businesses that meet diversity criteria and have been vetted by the certifying body. 

 

 

After finding potential suppliers, you can schedule a meeting and discuss your unique needs. Some organizations even meet multiple sets of diversity criteria.

  

 


The challenge of finding companies that meet organizational criteria while embodying true diversity is indeed daunting. However, by utilizing organizations like the NGLCC and NMSDC, businesses can navigate this challenge with greater clarity and purpose. Supplier diversity is not just about ticking boxes; it's about fostering an ecosystem of inclusion, equity, and opportunity for all.

 

 


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