Connecting The Dots in Supplier Diversity

What are some words that come to your mind when you hear ‘supplier diversity’?
Here are some words that best describe it – Opportunity, Access, Equity, Inclusion, Relationship-building, Innovation.

Supplier Diversity is procurement that is ethical. It is a business strategy and a smart business choice.

Who benefits from supplier diversity?

Diverse businesses – Diverse-owned businesses, including women, LGBTQ2+, veteran, and minority-owned companies often face hurdles that other companies do not, including challenges with access to funding, the ability to network as easily, prejudices, and other issues. Supplier diversity helps these businesses get a leg up to grow their business – offering them business allows them to scale up and compete better in the market, which further encourages innovation within supply chains, fostering growth within communities.

Organizations seeking diverse suppliers – Supplier diversity not only benefits diverse businesses, it also benefits corporations and government organizations with supplier diversity programs in place. It provides numerous tangible benefits to the company, including increased market share, increased company flexibility, and greater competition among a company’s suppliers. Also, increased diversity in the supply chain allows a company to expand more easily into markets with different demographics.

Local economy – Buying from diverse businesses allows them to support and create jobs, increase wages, and pay more in tax revenue, which benefits their local communities. In the long term, supplier diversity programs are likely to attract new businesses to the supply chain and give companies open access to different markets. This, in turn, provides the fuel for a dynamic and competitive economy.

Now that we have established the benefits of supplier diversity, let us look into:

Who the key players in a supply chain are.

Diverse Supplier
A diverse supplier is a business that is at least 51 per cent owned, operated, and controlled by either women, members of an Indigenous community (e.g., First Nations, Inuit, or Metis people), members of a visible minority group or members of the lesbian, gay, bisexual and transgender (LGBT) community.

  • Tier One (Tier 1) Supplier: A tier one supplier provides its products or services directly to the large corporation, for example a WBE company selling its products or services to Company X.
  • Tier Two (Tier 2) Supplier: A tier two supplier provides services or products to the tier one supplier of a large corporation, for example, a WBE company selling its products to Company X’s Tier 1 supplier would be considered a Tier 2 supplier to Company X.
  • Opportunities for diverse suppliers might be in some larger organizations at the Tier 3 level or below. It is critical for diverse businesses to understand their place in the supply chain and for supplier diversity professionals to communicate this information to suppliers.

Large Corporation
A large corporation is any organization with 500 or more employees. Some large corporations have complex multi-layered supply chains making it harder for diverse businesses to navigate their way through the system. Supplier Diversity Programs are designed to increase diversity within large supply chains and simplify selling to large organizations for diverse businesses.

Supplier Diversity Program
Organizations with commitment to supplier diversity go beyond promises. They work diligently on improving their procurement policies and processes to create an environment where diverse businesses have access to buyers, visibility to the procurement opportunities and opportunity to bid on (and win) these opportunities. Such organizations follow supplier diversity best practices, measure their impact and report their spend with diverse suppliers. In the long term these programs become embedded into company culture and best practices.

A well-established supplier diversity program has a wide spread positive impact, a ripple effect that affects everyone involved in the supply chain. Supplier Diversity Programs take an enormous amount of commitment and the impact that not only benefits the bottom line, but creates a healthy competitive edge, increased market share, sustainability and economic growth for women and their communities.

WBE Canada has a strong commitment to ongoing success and improvement of Supplier Diversity in Canada. To support these efforts within corporate and government organizations, we developed Supplier Diversity Accelerator – a complimentary customized consulting for our Corporate Member organizations (included in membership fees) and Supplier Diversity Data Services with free data scrub and significantly discounted data reporting services (spend reporting, diverse supplier registration portal).

Supplier Diversity Toolkit
In addition to all of the above, WBE Canada launched Supplier Diversity Toolkit – a step-by-step guide to developing a Supplier Diversity program. This resource is once again complimentary to our members. Toolkit provides you with access to the information, resources, templates, case studies and much more to help you start your journey without guessing what your next step should be. Toolkit is accompanied by the full-day workshop where you will have the opportunity to review the information, learn from your peers and get answers to your questions. The first Workshop was held in October and the second workshop is being planned for early 2022.

More and more private and public organizations are looking to diversify their supply chains in Canada and globally as a way to stay competitive in today’s marketplace. The benefits of membership are infinite. Not a member yet? We’ll be happy to support your supplier diversity initiative. Learn more here.

More terms and definitions can be found here.