How Supplier Diversity Works

Supplier diversity is all about building relationships and trust to enable business opportunities between corporations and historically under-utilized groups, like women business owners.

Supplier diversity is the strategic business process of corporations reaching out to groups not traditionally included in their supply chains, including women-owned businesses that want to compete for contracts.

It means implementing processes to identify, vet and match under-represented suppliers to procurement opportunities and then measuring achievements. Utilizing a supplier base that reflects the growing diversity of Canadian businesses in particular and the population in general makes good business sense.

Women are involved in 85% of purchasing decisions, and are bringing quality products and services to the marketplace at an escalating pace. Despite this, they receive a very small fraction of large contract opportunities. WBE Canada estimates that Canadian women-owned businesses comprise less than 5% of all domestic and international suppliers to corporations and governments.

The result: women’s businesses don’t grow, big business misses out on value and innovation, and national productivity and GDP suffer.

It is important for Canada to mirror the growth of supplier diversity spreading through multinational corporations in the U.S. and U.K. Over 95% of Fortune 500 companies have supplier diversity programs that target historically underutilized businesses, expand buyers’ choice, and boost innovation, competitiveness and market knowledge.

With the trend towards contract bundling in the US, over 80% of multinational corporations are now requiring supplier diversity efforts from their tier one and tier two suppliers. They advertise this “spend” with diverse populations, and are taking their business practice global, setting new benchmarks for measuring and celebrating diversity in supply chain contracts they award.

Working with its corporate members and regional partners, WBE Canada provides programs and services to assist women-owned enterprises in better accessing business opportunities with corporations. They are well positioned and ready to work at all points in the supply chain.

The Biggest Misconceptions

Supplier diversity is not a social program targeting specific groups and is not intended to create an unfair advantage for women or other historically underutilized groups like minorities and Aboriginals. It’s about levelling the playing field so that all potential suppliers can participate in and benefit from corporate dollars.

It does not mean a guarantee of business for certified firms from participating corporations.

Supplier diversity is a market access opportunity for certified businesses, enabling them to have a fair opportunity to tender for contracts. After that, it is business as usual – women’s firms must go through the standard corporate or government tendering process, and be assessed on their merits with no regard to gender.

Learn more about being a WBE Canada Corporate Member

Learn more about becoming a WBE Canada Certified Women Business Enterprise (WBE)