Business owners should consider their supply chain and its effect on their business model. Building a business that supports minority- and women-owned businesses is important to your customers. Your customers need to be aware that you are committed to supporting demographically diverse vendors. One of the most effective ways to do this is to implement a Supplier Diversity Program.
What Is a Supplier Diversity Program?
This program is a strategy designed to recruit and utilize minority-owned businesses for your supply needs. These companies can be any combination of women-owned businesses or any enterprise identified as a small business by SBA. These potential suppliers employ over 12 million people according to a report by Dun & Bradstreet. By focusing on contracting with these vendors, your business makes a significant impact on these businesses and their employees.
How Do I Establish a Program?
Before you create your Supplier Diversity Department, evaluate your current supply chain. You may already have established contracts with many minority-owned vendors. After you establish your baseline, contact SBA to determine what percentage of qualified vendors are in your industry.
With the above information, you can create a strategic plan to improve your vendor diversity. Be sure to modify your mission statement to reflect your goals. The most successful Supplier Diversity Programs begin with a top-down implementation. Ask employees, customers, and business partners for recommendations.
How Should I Monitor the Program?
Many business owners hire a Supplier Diversity Manager to manage the program. They help identify categories you may not have considered – women-owned businesses, disabled veteran-owned businesses, or LGBT-owned businesses. Managers can also work with suppliers to complete necessary forms that identify them as minority-owned suppliers. These forms help you meet your goals.
As the business owner, you should establish standards your company will achieve. Keep these things in mind as you evaluate your program:
- New businesses should incorporate supplier diversity as a primary business objective. Building your business based on this goal helps all employees understand your commitment from day one.
- For established business owners, communication regarding this new strategy should come from you. Work with individuals or small teams to make sure everyone understands the policy and how it will benefit the company.
- Maintain a system that details and evaluates your vendor guidelines. Ensure that your team is working with strong vendors that provide quality products on your timeline.
- Meet with vendors to see what other needs they may have. You can help strengthen both your and the vendor’s business network.
Building a Supplier Diversity Department will help establish your business as a forerunner in your industry. Your customers, vendors, and employees will see your commitment to embracing diversity and improving your brand reputation.