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Debunking Supplier Diversity Myths – Part 3

Supplier Diversity Myths

Welcome to Part 3 of our series on myths surrounding Supplier Diversity. Today’s post looks at  an additional two myths, this time with a focus on supplier diversity programs. Let’s start with the facts: corporations and governments develop these programs to drive change internally, track their spend with diverse suppliers and measure its impact on their organizations. Most supplier diversity programs start and operate for one of the following reasons:

  1. Compliance – to ensure that the company meets mandated compliance requirements.
  2. Corporate Social Responsibility (CSR) – these policies usually function as built-in self-regulating mechanisms to ensure active compliance with the law, ethical standards and international norms.
  3. Competitive advantage – the best supplier diversity programs are hosted by companies that position programs as a business imperative, a revenue enabler, a competitive advantage.

No matter the reasoning behind the diversity program, following are 2 myths that most supplier diversity & procurement professionals know very well. Let’s have a closer look at them.

Myth #5: New supplier diversity programs will drive away the existing suppliers I like

I immediately want to say “Chill!” Your supplier diversity program is based upon and runs according to the goals set by the organization. The best programs are not just about contracts, but also about education of both buyers and suppliers. All supplier diversity programs that I have come across promote social responsibility, not delete competition.

Nobody should ever be that attached to their suppliers.  For BMO it’s what makes good business sense to meet our goals,” Catherine Grosz, BMO.

Amanda Krogol, General Motors LLC adds, “Great suppliers will never be driven out of the supply chain due to inclusion.  Diversity programs will only enhance your supply-base with quality suppliers that may not have had an opportunity or access with the right team within your organization.  Collaboration is key!  New suppliers and existing suppliers may benefit from joint ventures or partnering opportunities.”

I must agree. If you are too attached to your suppliers you might be in trouble. Procurement should constantly be looking for the highest quality, best value and innovation, not the same old. There are  too many examples out there of companies that neglected innovation who either barely or didn’t survive the consequences of resisting change. Supplier diversity makes innovation possible.

Myth #6: I already work with diverse suppliers so I don’t need to build a program

I get it. Building a supplier diversity program and tracking your spend with diverse suppliers can be costly and time consuming. And just like everything else in business, unless you understand its value for your business and ROI, it will most likely become the first program you “kill” when the economy takes a downturn, immediately impacting your smaller suppliers and local communities. As a result, both the economy and your company will take longer to recover.

Having a supplier diversity program not only helps you track your actual spend and provide data to stakeholders to prove that your initiative is working and impacting your business’ bottom line, but, and this is important to realize, it also helps diverse suppliers find you and apply to join your program, enlist in your portal, thereby increasing your resources.

Supplier Diversity is about identifying opportunities for those smaller suppliers that may be under represented in their communities,” said Catherine Grosz, Manager, Supplier Diversity, Procurement at BMO.

“A Supplier Diversity Program will help to advocate on behalf of your diverse suppliers, as well as your buying organization.  It can help to build strategic relationships with your existing suppliers!  Use your Supplier Diversity organization as a resource.  If your Diverse spend is a metric or a requirement, Supplier Diversity can help to ensure compliance and success.” Amanda Krogol, Supplier Diversity Program Manager, General Motors LLC

Many of the myths we encounter around Supplier Diversity Programs are often based on assumptions. To believe in them only highlights limited thinking, and a lack of practicality. An innovative and intuitive organization makes the most strategic decisions possible to increase their opportunities for success. Those decisions must be made with thorough research. How this translates to Supplier Diversity is that if you don’t know who all the players are, then you cannot make a fully informed decision. Without the proper research of solutions available, your final decision may be ‘good enough’, but does it guarantee the best outcome because you have examined all of your options?” Alan Roberts, DCM

WBE Canada is a nonprofit organization founded by Corporate Members to provide certification, training and networking services to develop Canadian women-owned businesses as suppliers for large public and private organizations. We manage the database of Canadian businesses that are majority owned, managed and controlled by women.

In the name of Canadian women-owned businesses (or WBEs, as we call them here at WBE Canada), please consider building your supplier diversity program and supporting diverse businesses through your procurement opportunities. Your business will thank you!

Click here to access a final dose of supplier diversity myths.

Silvia Pencak
President, WBE Canada

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