4 Steps To Developing a Supplier Diversity Program in Government Supply Chain

By Mike Pacholok

Are you looking to introduce a supplier diversity program into your governmental supply chain but are not sure where to start?

A supplier diversity program can have a positive impact on your government supply chain. Including small and medium, diverse owned businesses from within your local economy  will help introduce new competition and innovation into your supply chain.  Additionally, when a local diverse supplier wins contracts, the resulting growth often resounds within that diverse community with increased employment opportunities.

Here are some tips that you can use to help you get started.

First, consider your own data.  Understanding how diverse your existing supply chain is, is an important step to help determine a baseline.  Your supply chain may be more diverse than you think.  You can connect with various supplier diversity certification organizations who can help you with an initial scan of your supply chain.  Canadian certification organizations are:

• Women Business Enterprises Canada Council (WBE Canada) – women-owned businesses
• Canadian Aboriginal and Minority Supplier Council (CAMSC) – businesses owned by Aboriginal and visible minorities
• Canadian Gay and Lesbian Chamber of Commerce (CGLCC) – businesses owned by LGBTQ2+
• Canadian Council of Aboriginal Businesses (CCAB) – Aboriginal businesses
• Inclusive Workplace & Supplier Council of Canada (IWSCC) -businesses owned by people with disabilities and veterans

These organizations will be able to tell you which companies have become certified as a diversely owned business, meaning a business that is 51% or more owned, managed or controlled by the particular diversity group they represent.

You can also survey your supply chain to identify which of your suppliers are certified diverse, have a supplier diversity program or identify as a prospective diverse supplier, who you can then introduce to the appropriate certification council.

Once you have an understanding of your data, this will support the development of either soft or hard targets within your organization and understand your supplier footprint (ie: number of minority, Aboriginal, women, LGBTQ2+, veteran and disabled vendors).

Second, it’s important to understand that one of the biggest challenges in government procurement is the requirement to abide by national and international trade agreements.  That may prove daunting to a fledgling supplier diversity program.  A good way to start is to focus on the procurement below the thresholds of these agreements, where you are able to do invitational procurement.  This allows you to work with your organization and invite the appropriate diverse supplier to compete against other suppliers in your supply chain.  Or you can decide to only invite diverse suppliers to that particular procurement.  For diverse suppliers it gives them an opportunity to learn more about your procurement practices and an opportunity to work with your clients.

Third, find a senior leader champion in the organization to help drive the introduction of a supply chain diversity program into your organization.  You are going to need to deploy change management to ensure that your organization understands the value of a supplier diversity program, and having a senior leader championing the program will help.

Finally, consider joining any or all of the above noted supplier diversity certification organizations.  These organizations provide outstanding support for growing a supplier diversity program and can introduce you to other corporations (both public and private) who are willing to share their ideas and experiences.   Becoming involved with certification organizations can help you with  direct access to diverse suppliers through data management portals and a variety of interactive events.

With these tips you are well on your way to starting your program.  It will take time but deliberate actions can help you along your journey. Once you have your program established, future opportunities will present themselves including creating a tier-2 supplier diversity program, where your general contractors report on their use of diverse suppliers in their supply chain.  For now, understand that you’re not alone, there are a lot of resources out there and many organizations are in this space and are willing to share so that we all can expand supplier diversity in Canada.

Mike Pacholok is the Chief Procurement Officer for the City of Toronto with past experience as a municipal law solicitor with an emphasis on procurement law. Under his leadership the City of Toronto implemented Social Procurement policy. The City of Toronto is playing a leadership role for Canadian public institutions that are interested in channeling their procurement needs to help build more equitable communities, deploying a unique strategy that blends elements of the American and European approaches.

Mike is also a winner of WBE Canada’s 2020 Supplier Diversity Leader award and Chair of WBE Canada’s Public Service Development Committee which seeks to increase adoption of supplier diversity in public procurement. 

City of Toronto’s Social Procurement Program

Supplier diversity is important to the City of Toronto. The Social Procurement Program aims to achieve inclusive economic growth by improving access to the City of Toronto’s supply chain for diverse suppliers. From 2017 to 2020, the City of Toronto awarded $6.2 million dollars in low value contracts to certified diverse suppliers as part of the Social Procurement Program. A more inclusive approach to procurement represents a deliberate City of Toronto strategy to support broader City social, economic and workforce development goals, while minimizing, through a carefully crafted policy framework, risks to the City and to the integrity of the City of Toronto’s procurement processes. The Program creates a foundation to shift the City of Toronto’s procurement culture long-term, showing how all City divisions can make a positive impact on the City’s poverty-reduction goals, which is important to the City of Toronto. To learn more about City of Toronto’s Social Procurement Program please click here.

Become a WBE Canada Corporate Member

As a certifying council for Canadian Women Business Enterprises (WBEs), WBE Canada is a strong advocate for including more women-owned businesses in supply chains across Canada and beyond. In addition to certification, we also help develop women-owned businesses and connect them to opportunities within corporate and government supply chains. Our support for WBEs would not be possible without our work with our buyer community. WBE Canada provides its Members with access to verified WBE database (the largest database of certified businesses in Canada), training and consulting services, networking and matchmaker events and other customized services to support supplier diversity program development and improvement.

In November 2020 WBE Canada introduced its Pilot Government Membership program with streamlined membership fees and enhanced support to encourage adoption of supplier diversity in public sector organizations*. While adoption of supplier diversity was only at the City of Toronto, BDC and the Government of Canada before the pandemic, we are glad to see increased support for women-owned businesses as we welcomed EDC, City of Brampton, CBC,  OPG and CMHC into our Member community. To learn more click here.

*Update December 2021: WBE Canada Board of Directors adopted Government Membership model into Corporate Membership structure as an official pricing model for Government and Nonprofit organizations to encourage implementation of supplier diversity in these organizations. Review our Membership for more details here.