ASE Blogs

4 Obstacles to Supplier Diversity and How to Overcome Them

Jason - ASE Supplier Diversity Manager
Posted by Jason - ASE Supplier Diversity Manager on Oct 4, 2022

There is no denying that expanding your supply chain to include diverse partners can help add value to your business. But it can also help generate $280 billion in income — and add more than four million new jobs — to our flagging economy. Thought leaders are proposing that an emphasis on supplier diversity could be the key to our economy’s long-term success and help to revitalize and strengthen many minority communities.

Yet even though supplier diversity strategies have become a targeted task for many corporate boards, there is still hesitancy to embrace underrepresented groups in the business landscape. This article will tackle the most common obstacles to supplier diversity and provide actionable solutions that you can implement today.


Overcoming Obstacles to Supplier Diversity with Knowledge
Even though many large organizations and C-suite players across industries have committed to meeting specific supplier diversity goals, there has been a significant struggle in moving from commitment to action. We will address the four most common roadblocks to supplier diversity with the data you need to support — and achieve — your diversity goals.

Obstacle 1: Using Standalone Initiatives
Many companies approach diversity goals by focusing on only short-term sourcing events that may introduce their business to a small potential group of diverse partners. However, to create a sustainable supply pipeline, long-term engagement is necessary. For example, suppliers must go through a qualification process that can take up to 18 months to achieve.

If your initiatives lack focus or do not have built-in accountability because they are hyper-specific to one department, the strategy would be to make diversity part of your broader objectives.

Obstacle 2: Lack of Alignment within the Organization
When competing priorities confuse the procurement landscape, diversity initiatives often fall by the wayside. Procurement managers may have to meet several goals, from quality and speed to diversity. These hard-and-fast targets make it simpler for managers to stay with incumbent suppliers rather than branch out to more diverse partners.

To correct this, ensure that leadership teams prioritize the acquisition of diverse suppliers over other targets and support procurement managers with the time — and money — needed to foster long-term relationships.

Obstacle 3: Few Resources Dedicated to Diversity
Many companies often overlook the fact that diverse suppliers may need additional assistance to grow. Diverse partners are often smaller, and diversity objectives that do not earmark resources specifically toward helping these organizations succeed often fail.

To overcome this obstacle, companies such as UPS are addressing diversity challenges head-on through dedicated resources. Once a company qualifies as a supplier, they are assisted in understanding and meeting specifications and requirements. Mentoring, onboarding strategies, and risk mitigation initiatives can help your diversity program succeed — and grow.

Obstacle 4: Use of Only Tier 1 Spending
In Tier 1 diversity spend, your company will hire a diverse partner directly — and that is laudable.
However, by ignoring those companies that, while not owned by a minority, do an exceptional job of
recruiting, training, and mentoring both diverse staff and diverse subcontractors, you are restricting
your diversity objectives. Remember, the end goal of a supplier diversity program is to foster a healthier, more versatile supply chain while providing minority businesses with the support they need to thrive.

Using Tier 2 spending can help you assist diverse suppliers by supporting companies with strong leadership, outreach, and inclusion practices.

How ASE Brings Diversity to Light
We know that developing a strong supplier diversity program is not easy. It takes commitment and the willingness to realign organizational values to reach those end targets. But diversity initiatives don’t just help minority companies — they also bring strong advantages to the companies that employ them. Companies that use diverse suppliers save more money and are more efficient than those that do not, resulting in a more robust bottom line.

At ASE, we take diversity seriously. After all, we are a Service-Disabled, Veteran-Owned Small Business (SDVOSB) in our own right. We actively recruit, train, and engage a diverse workforce and look forward to strengthening our supply chain using talented businesses representing all walks of life.



Topics: SDVOSB, Buy American Veteran, Community, Veteran, Small Business, Purchasing, Sustainability, Cost-Savings, Supplier Diversity, GPO, Supply Chain

Leave Comment