SUPPLIER DIVERSITY CAN HELP YOU NAVIGATE TODAY’S CHANGING LANDSCAPE

In the first blog post of this series, we defined supplier diversity (SD) as “a proactive procurement program that encourages the purchase of goods and services from businesses owned by a diverse cross-section of different groups of people, including (but not limited to) minorities, women, the disabled, the LGBT community, and veterans.”

Faced with changing demographics and business growth rates, organizations must learn how to incorporate minority employees, customers, and suppliers into their business processes if they want to gain and maintain a long-term competitive edge. This time, we’ll examine some of the challenges and opportunities brought about by large-scale trends that have an impact on every business or nonprofit, including:

  • Rapid technological innovation,
  • Continuing globalization of the supply chain, and
  • The record level of mergers & acquisitions.

Technology & Innovation

No matter the size of your organization, the Internet and information technology can provide you with the tools you need to identify and connect with diverse suppliers. An easy starting place is to post a highly visible link on your website providing information about your supplier diversity program.

A strong Internet presence can help you achieve supplier diversity goals by enabling your suppliers to register, certify, and submit their proposals online. Companies and other organizations can actively recruit diverse suppliers by:

  • Advertising in supplier diversity publications such as Minority Business News, Diversity Monitor, and Diversity Inc.,
  • Using their websites to attract minority suppliers, and
  • Making use of intermediary organizations (like ConnXus) to identify qualified, certified minority suppliers.

Supply Chain Globalization

In today’s transnational business environment, global supply chains are inevitably affected by adverse events that may take place thousands of miles away. For example, when Thailand recently suffered widespread flooding, many of its computer disk-drive manufacturers were hit hard after key suppliers were forced to shut down. These companies urgently needed to reroute work to other suppliers to regain production stability.

Because these supply disruptions are difficult to manage and require flexibility, manufacturers in particular need to find ways to manage multiple suppliers worldwide quickly and effectively. By using technology-based systems to provide accurate, real-time data on the entire global supply chain, companies can collaborate and communicate with all their suppliers at once.

This improved ability to prevent or minimize supply-chain disruptions has a direct, positive impact on the bottom line, by:

Minimizing risk of loss,

Preventing delays orders and deliveries to customers, and

Maintaining quality control.

The M&A Boom

Today’s record level of mergers and acquisitions (M&As) reflects the widespread belief that the combining similar business entities should produce improved performance and revenues through greater efficiency and economies of scale. Unfortunately, most M&As don’t deliver on that promise. Studies reveal that up to 60% of mergers actually hurt the overall performance of the combined firm, with fewer than 25% percent of all acquisitions reaching their strategic objectives.

One reason for this poor track record is that many companies fail to implement an effective, efficient consolidated supply chain after the merger. To identify redundancies and possible synergies, companies should invest in a thorough post-merger supply chain assessment. This review should cover:

  • The current organizational structure,
  • Opportunities for improvement, and
  • Recommendations for consolidating systems and processes to increase efficiencies and avoid disruptions.

We also recommend creating a unified database that integrates transactional data from all “legacy” supply-chain systems. Modern database programs provide a wide range of simple tools designed to coordinate and interweave formerly disconnected transaction systems.

The connections between your organizations’ diverse supplier programs and these macro-level trends may not be immediately obvious, but they are real. Some companies have already mastered the art of using SD programs to help them navigate successfully in today’s complex competitive environment. With the aid of a proactive, consolidated supplier diversity program, you too can find a path to success in today’s business landscape.


STAY TUNED! In the next post, we’ll discuss more reasons why supplier diversity really matters.

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