10 Steps to Start A Supplier Diversity Program

1. Find someone to drive and manage the process internally.

  • If your company is serious about supplier diversity, this position should be full time.
  • It is preferable that the person report into supply-chain  leadership.
  • Person should have experience in procurement/sourcing so he or she can speak the same language as internal stakeholders.

2. Understand your company’s culture and how your supply chain operates.

  • Know what the commodity strategy is internally and where the low-hanging fruit resides. This will help you gain momentum quickly.
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A League of Your Own
Last November, Stephanie McLarty found herself in the kind of meeting most young entrepreneurs dream of. The 30-year-old founder of REfficient Inc., a Hamilton-based provider of environmental asset management, had made inroads with a major telco but hadn’t come close to sealing a deal. Then, after meeting the telco’s vice-president of procurement at a conference, the exec invited McLarty to make her pitch. Why? Partly because of McLarty’s gender.

In the 21st century, when the sex, race or ethnicity of an entrepreneur generally bears little influence on perceptions of his or her business acumen, McLarty never thought being a woman could affect her prospects. But she has come to learn that sex really can help sell. That’s because, in the procurement world, woman-owned firms are categorized as “diverse suppliers.” Growing ranks of large organizations in Canada are putting more stock in the notion that supplier diversity is good for business, with some even mandating that a percentage of expenditures must go to diverse suppliers.

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Inaugural Awards Recognize Supplier Diversity in Canada

ABC Group Inc., one of North America’s leading plastic automotive parts suppliers, was recognized with a WEConnect Canada President’s Award for its contribution to the great strides forward being made in Canada in opening supply chains to women-owned businesses. The Tier 1 supplier to such automotive giants as General Motors is not only certified as woman-owned (WBE), but also demonstrates its commitment through its own Supplier Diversity program.

“It’s time to celebrate the successes achieved by champions of supplier diversity in this country,” saysMary Anderson, President, WEConnect Canada, the certifying body of women business enterprises (WBEs). “That’s why WEConnect Canada created the Winning Business Awards. Through efforts by our corporate members, partners, and by certified WBEs, as well as the funding support received from Status of Women Canada, a once little-known concept here is now making a measurable difference in the supply chain.”

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Supply Chain Diversity Good For Business

Adopting procurement practices that favour businesses run by women, minorities and lesbian and gay entrepreneurs is not just the socially responsible thing to do, it can also promote innovation and cost savings, according to Canadian companies that are adopting diversity supplier policies.

“There’s certainly the clearer corporate responsibility aspect to it, but I think if you are partnering with a provider that is more flexible, that is providing a unique service, then I think there’s a business benefit to it as well,” said Uros Karadzic, national leader for EY’s (formerly Ernst & Young) talent and reward practice and the firm’s bEYond network, which supports and promotes LGBT (lesbian, gay, bisexual, and transgender) inclusiveness.

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Step Up: Uncover Growth Opportunities

Many big corporations support diversity in their supply chain. This means that these companies encourage procurement of their supplies from minority or women-owned businesses. Supplier Diversity opens a door of opportunity for women entrepreneurs to take their business to the next level. Getting certified as a Woman Business Owner, or, WBE (pronounced Wee-Bee) is the first step in this process and can connect you to new supply chains. WEConnect Canada certifies women-owned businesses in Canada.

How do you access corporations once you are certified?

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Supplier Diversity in the GTA

Statistics Canada predicts that nearly 63 per cent of people living in the Toronto census metropolitan area will belong to a visible minority group by 2031. These are the future customers, employees, investors and taxpayers of the Greater Toronto Area (GTA). They will also be the future owners and operators of businesses that will supply commercial, not-for-profit and governmental organizations. Now is the time to prepare for this future, the time to embrace supplier diversity (SD).

This report, part of the DiverseCity Counts research series, is an examination of supply chain policies and practices of large public, private and voluntary organizations. These policies and practices are important, yet often overlooked, levers of change and influence. This study focuses on SD programs; more specifically, on procurement policies and practices centered on doing business with suppliers owned by visible minorities.

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Sustaining the Momentum

Small business is an essential component of Canada’s economic fabric. Small businesses employ approximately 5 million people, almost half of Canada’s private sector labour force. Furthermore, in 2003, 14 percent of the total Canadian labour force was self-employed, accounting for approximately 2.4 million workers.

1 Women account for a significant portion of small businesses owners and self-employed workers. Over the last 20 years, Canada has seen a 200-percent increase in the number of women-owned firms.

2 By 2001, nearly half (47 percent) of all small and medium-sized enterprises (SMEs) in Canada had at least one female owner. In 2003, women held majority ownership in 18 percent of SMEs, an increase of 3 percent from the previous year. The employment contribution of women-owned firms is also significant. In 2003, more than 570,000 people were employed by a majority women-owned firm.

3 Firms with at least one female owner employed 2.6 million people. Roughly one-third (34 percent) of the self-employed in Canada were women, a proportion that has been rising over the last two decades.

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Supplier Diversity or Why the Network Matters

I was going to title this post, “It’s the Network, Stupid: Supplier Diversity,” but a little Googling shows how overused that phrase has become, appearing in everything from medicine to social media and marketing to grassroots politics. So, title change notwithstanding, I’m still going to focus on why the network, of suppliers and buyers, is one of the most important factors in supplier diversity, and therefore entrepreneurial success for businesses which supply goods or services to other businesses.

During the recent U.S. Business Leadership Network (USBLN) national conference, I focused much of my time on their supply chain track. Their Disability Supplier Diversity Program is at the beginning stage of something very important—creating networks of suppliers, as well as buyers. Of particular importance is knowledge sharing about supply chain—how the supply chain works, and how small businesses can become part of it. The emphasis here isn’t selling directly to the top company in the supply chain by the diverse suppliers, but on how suppliers become part of the supply chain. This may include partnering with other suppliers or becoming a supplier to other suppliers.

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Supplier Diversity, Paradigm Shift

In a previous article I wrote titled “Spend Doesn’t Matter”, I highlighted the matrix driven goals followed by most corporations for their Supplier Diversity initiatives. For those unfamiliar with the term Supplier Diversity, “it is a business program amongst Fortune 1000 companies that encourages the use of privately-held companies owned by historically under-utilized businesses when purchasing goods/services.”

The fundamental goal of Supplier Diversity is to include businesses owned by diverse people in the supply chain of Fortune 1000 companies to build wealth within those communities. My objective is to create a paradigm shift to ensure that small businesses are the primary focus of that process.

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Why Supplier Diversity Certification is Important for Minority and Women-Owned Businesses

The Benefits of Small Business Certification

1. Access to corporate supply chains.

Although certification is no guarantee of getting the business, it does increase the chances and enables you to compete for these contracts. I find that many companies’ supplier diversity people are true advocates for M/WBEs; WBENC/NMSDC certification and can help solidify the connection, assuring that those firms get requests for proposals and have their opportunity to shine.

They will also gain access to a current list of supplier diversity and procurement executives at hundreds of major U.S. corporations and federal, state, and local government entities. They receive national recognition and opportunities to pursue business deals with corporations as well as other M/WBEs.

These benefits should not be overlooked, especially when competition is tougher than ever.

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Trade Commissioner of Canada

A useful website with more information regarding Supplier Diversity and it’s impact in Canada.