Supplier Diversity Innovation Track: From Best to Next Practices


Daryl Hammett, ConnXus COO

“Our leaders must be willing to have the conversation to reset the expectation…Let’s raise the bar on increasing Tier 2, 3 and 4 supply chain spend.” – ConnXus COO, Daryl Hammett

Supplier diversity innovation means moving past “best practices” toward the future, or what ConnXus refers to as“next practices.” This means moving beyond meeting reporting deadlines to challenging the status quo and increasing spend not only in Tier 2, but in Tier 3 and Tier 4.

The future of supplier diversity is rerouting mandatory reporting requirements by challenging the status quo: Increasing multi-tiered spend, building relationships with local businesses and reflecting the economy through key performance indicators.

As procurement officers, supplier diversity and supply chain managers, let’s go beyond basic tracking and reporting spend to measuring the economic impacts of diverse hiring and engaging with local business.

In order to reach this heightened level of innovation in the supplier diversity arena, three key changes need to be addressed:

Increase Engagement with Suppliers

Increased enterprise engagement with Tier 2 and Tier 3 suppliers will diversify the supply chain and solidify future business opportunities. By registering suppliers in a portal database, supplier relations, qualifications and specific data are readily accessibly to maintain and prospect impending business relations. Place the focus on building mutually-beneficial, long-lasting relationships with suppliers.

Impact Local Businesses

Engaging with not only prime suppliers, but also Tier 2 and Tier 3 suppliers gives the enterprise company more visibility, opening up windows for prospective primes in the future. Local vendors will reduce transportation costs, and in turn, corporations are fueling and mirroring inclusive economic activity.

Revamp KPI’s

Key performance indicators, or KPI’s, should already be marked, managed and measured on a tight schedule. Setting goals to track each point of direct and indirect spend in the supply chain will only enhance and boost supplier diversity initiatives. Measure not only the percentage of spend dedicated toward diverse suppliers, but also set goals for increasing the percentage of spend over the next five and ten years, while enhancing supplier development and efficiency.

Tweaking these supplier diversity “next practices” will stimulate more diverse supply chains and fuller reports of indirect and direct multi-tier spend, while increasing corporate comprehension of the shift in the local economy.

Let’s not lose sight of the importance of reporting tiered spend, but begin to aggregate our focus on spend that echoes the economy–ultimately creating a more robust supply chain, reducing costs, and fueling the local economy and inclusion efforts–a win-win for both the enterprise sector and the vendors. Let’s never forget, suppliers are and can be customers.

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