Even as early as the 1960s, companies were focusing on diversity, equity, and inclusiveness (DEI) as the federal government put requirements into place that emphasized working with minority-owned businesses. In today’s modern business landscape, however, more businesses are looking to amplify their supplier diversity to underscore their social commitments and to ensure a healthier, more resilient supply chain.
As the recent pandemic showed us, a diverse supply chain is essential to overcome disruptions that can occur due to world events, economic circumstances, and even adverse weather conditions. Moving supply chain strategies away from single regions or sources to a broader base can provide greater protection against overwhelming disruptions — as well as a host of other benefits.
How Supplier Diversity Can Boost Resilience — and More
Supplier diversity is not just about creating social advancement initiatives for minorities — it is a goal that firmly supports higher overall performance and brings a host of benefits to the economic table, including a stronger, more resilient workforce. Here is just a small example of the advantages gained by cultures that support supplier diversity:
1. Economic Benefits
The economic benefits of supplier diversity are profound. The United States government is in the process of expanding its supplier diversity initiatives and with good reason — nearly two-thirds of millennials refuse to take jobs with companies that are poor stewards of social responsibility. Investors know this and spend more dollars with companies that emphasize diversity.
With the help of minority businesses, our economy could generate $280 billion more in income and provide an additional four million jobs. Importantly, many of those new positions would be in management, C-suite, and other executive positions, helping to create wealth among minority communities and improving outcomes across generations.
2. Bottom-Line Benefits
Partnering with diverse suppliers does more than just support our economic health. For every million dollars you spend in procurement among diverse partners, you can see an extra $3.6 Million for your bottom line revenues. In general, a diverse supplier base can help reduce your operating costs and help you conserve up to 20% across your procurement operations.
3. Improved Innovation
One of the things that drive business resilience is innovation. When you reach out to diverse suppliers you increase your access to ideas and processes that can shift paradigms in a positive way. Smaller, unique businesses must be more agile and more aware of processes and strategies that can help differentiate them from competitors — and they bring these skills to the table for their larger corporate partners. In addition, working with smaller organizations allows you to develop deep and mutually beneficial collaborative partnerships since there are fewer levels of bureaucracy to get in the way.
4. More Channels for Reduced Costs
When you have a large and diverse database of vendors from which to choose, you can engage with several partners and drive down the overall cost of both products and services. Having many options when it comes to suppliers means that your supply chain is less likely to be impacted by crises or events in a specific region. In turn, this level of reliability helps your company to foster increased customer trust and loyalty as you are less likely to be impacted by disruptions.
Start Building Your Business Resilience Today
When you partner with diverse suppliers, you are increasing your opportunity to break into new markets, reach new customers, and be a part of a stronger, more resilient economy — and business model. Besides impacting the way you spend procurement dollars, supplier diversity offers a host of advantages that will improve your business’s bottom line and help you be more agile in the face of adversity.
At ASE, we are proud to be a service-disabled veteran-owned business that takes diversity seriously. We work hard at hiring and mentoring a diverse staff and sourcing our products through our own supplier diversity initiatives. Our company has won multiple awards for our business acumen, including Inc.com’s 5000 — a list that gives attention to fast-growing, high-achieving private enterprises. Our understanding of supplier diversity and why it is important helps us drive our success — and share it with our partners.