Kathey K. Porter - Supplier Diversity For Dummies

This book isn’t designed to be an exhaustive or definitive work on supplier diversity. And I don’t expect you to become an expert on all things supplier diversity in order to become an effective practitioner. Supplier diversity is a process and a journey, and you won’t get to the Billion Dollar Roundtable overnight. Hopefully, though, you’ll be able to sharpen your skills and apply what you read here so that you can help your organization and the diverse businesses you work with. Focus on being that champion that everyone wants to support because they believe in the mission behind supplier diversity and the value it brings to the organization and the community.

Part 1

IN THIS PART …

Examine the growing demand for supplier diversity.

Discover the basis and history of supplier diversity.

Explain supplier diversity management (SDM).

Recognize the differences between supplier diversity and diversity, equity, and inclusion (DEI).

Understand the supplier diversity structure within your organization.

Chapter 1

IN THIS CHAPTER

Getting crystal clear on the nature of supplier diversity

Identifying the continued need for supplier diversity

Eyeing how external factors are changing the field

Exploring companies’ renewed investment in supplier diversity

S upplier diversity is a proactive business strategy that encourages buying from businesses that identify as belonging to a specific socioeconomic, historically disadvantaged, or underutilized demographic as suppliers, vendors, and contractors. The Small Business Administration, commonly called the SBA, classifies businesses in a number of categories. The most common are minority-owned or disadvantaged, women-owned, veteran-owned, and service-disabled-veteran owned. Corporations have expanded their definitions to also include LGBTQ to be more reflective of their local communities.

Supplier diversity has continued to progress from legislation to stabilize social unrest during the late 1960s to an economic imperative and a bona-fide management strategy. Supplier diversity programs recognize that when an organization buys products and services from suppliers that have been historically underutilized, it helps nurture and transform its own supply chain. Supplier diversity also gives organizations access to agile businesses with timely business solutions that allow them to gain a competitive advantage in the marketplace.

In this chapter, I cover what supplier diversity is (and isn’t) and why it’s still needed. I also identify some of the factors redefining supplier diversity and why organizations are recommitting to it.

Throughout my career as a supplier diversity professional, I’ve worked in a number of industries and have been housed in a variety of departments: economic development, procurement, business operations, and community relations. I’ve had a range of supervisors, including those who knew nothing about supplier diversity, which gave me the freedom and flexibility to do a number of things. I’ve had supervisors who thought they knew supplier diversity, which created an epic battle to execute anything. Then I had those who understood and embraced the mission, which led to a real group effort.

Organizations have any number of reasons why departments end up where they do on the org chart. Sometimes they make perfect sense, and sometimes — well, I’ll just say they don’t ask me for my input. Inevitably, where supplier diversity ends up says a lot about the value the organization places on it and determines how you’re able to behave in the role. Ultimately, this positioning affects what you’re doing and the results you’re able to deliver. For example, I’ve found myself involved in things that were really outside my scope, some that expanded my view of supplier diversity and how it touches the community.

Through my experience and my conversations with supplier diversity colleagues, I know that where supplier diversity sits in the organization must be intentional. It sets the tone for how the program operates; how it interfaces with others throughout the organization; how it establishes influence; how it carries out tasks; and how it interacts with the community, stakeholders, and senior leaders. Additionally, it unconsciously sways how others view the role, which can lead to confusion about what supplier diversity actually is. The following sections dive into the true functions of supplier diversity as well as those it doesn’t actually cover.

So, what exactly is supplier diversity? It’s

A procurement function: Supplier diversity ensures that any business has an opportunity to do business with the organization regardless of race, gender, sexual orientation, and so on. It does so by developing policies, processes, and procedures that make the procurement process inclusive, fair, and equitable.

A business and management strategy: Supplier diversity is a strategy that supports the economic development of diverse communities who are customers and consumers by giving them opportunities to sell to the organization. It’s a management strategy that allows organizations to progressively transform a company’s supply chain and gain a competitive advantage by doing business with diverse businesses.

An economic driver and entrepreneurial resource: Supplier diversity provides support, education, and mentorship to small and diverse businesses. When an economic gap exists, whether through lack of work prospects or access to business opportunities, the entire community suffers. This scenario creates a drag on social services and leads to the overuse of other community resources. Organizations, especially those that are large economic engines in the community, have a duty to look at their resources, step in, and create solutions. The access to resources supplier diversity gives entrepreneurs helps drive business growth and create economic stability for the entire community.

Here’s what supplier diversity isn’t:

A diversity and inclusion/HR function: Supplier diversity doesn’t focus on hiring and retaining a diverse workforce, creating employee resource groups, or cultivating an inclusive work culture (I discuss this difference in greater detail in Chapter 4).

A philanthropic function: As a procurement and business function, supplier diversity doesn’t award contracts or enter into contractual agreements with businesses based on need or hardship. It involves a competitive process that businesses must be qualified for and able to perform.

An external community relations or PR function: Yes, supplier diversity is community-facing thanks to its close relationship with the small and diverse business community, but it’s not a “voice” of the entire organization, nor does it act as a general spokesperson for all things happening.