4 Ways to Build a More Diverse Supplier Base
Incorporating more diversity in your supplier base in terms of working with more women-owned, minority-owned, veteran-owned and other diverse businesses can yield significant benefits for your company, including more innovation and improved procurement quality. But while the benefits are clear, it’s not always obvious to businesses how they can start sourcing from diverse suppliers, especially if their current supplier base lacks diversity.
However, building a more diverse supplier base does not need to be overly complex. Businesses of all sizes and across industries can start to increase procurement diversity through the following methods:
- 1. Utilize an e-procurement platform with diverse suppliers
- One of the quickest ways to gain access to a diverse supplier base is to utilize an e-procurement platform that has a marketplace full of products and services from diverse suppliers. Rather than having to source suppliers on your own and manually track spend across different vendors, e-commerce platforms like GoProcure (itself a diverse business) allow organizations to centralize procurement, where businesses can purchase products and services from diverse suppliers directly through the platform and automatically track their spend with these vendors.
- 2. Partner with supplier diversity organizations
- In addition to finding diverse suppliers through e-procurement platforms, other organizations that specialize in supplier diversity can help you add new vendors that broaden your network. For example, CVM works with companies to build their supplier diversity programs, such as by enabling diverse vendors to register for CVM’s database and then allowing corporate clients to search the database to find the right matches.
- Similarly, companies can reach out to or register with nonprofits and trade organizations like the National Minority Supplier Diversity Council or the Women’s Business Enterprise National Council to connect with diverse suppliers. Working with regional affiliates of these national organizations, as well as independent local organizations that promote diversity, can also be helpful, particularly for midsize businesses.
- 3. Publicize your supplier diversity efforts
- Another way to expand your network to include more diverse suppliers is to publicize your supplier diversity efforts. In doing so, diverse vendors or diversity-related organizations can learn about your efforts and potentially reach out to you to partner with your organization.
- Once your supplier diversity efforts gain momentum, publicizing this work can also lead to improved brand reputation among stakeholders, which can help further attract diverse talent and partners. A study by The Hackett Group found that companies with top-performing supplier diversity programs leverage social media to increase customer and brand awareness of their supplier diversity initiatives.
- 4. Leverage your existing supplier relationships
- Once you start to increase your supplier diversity, it can potentially be easier to pick up momentum and reap additional benefits of working with more women-owned, minority-owned, veteran-owned and other diverse businesses. That’s because once you start working with these vendors, you may be able to access their networks of diverse partners that you may not have otherwise been exposed to.
By following these methods, businesses can increase their supplier diversity in order to gain access to new offerings, new markets, and new perspectives, among other benefits. Starting from scratch may seem daunting, but working with e-commerce platforms and the variety of diversity-related organizations can help your business launch a supplier diversity program, and from there it can be easier to expand your network once you start to publicize your efforts and gain access to your suppliers’ networks.
Sandeep Gauba serves as the President and Chief Executive Officer of GoProcure. As a serial entrepreneur and having served some of the largest organizations in the world over the past 30 years, Sandeep is responsible for creating and driving the organization’s vision and strategy and helps our customers succeed in the global marketplace. Sandeep has over 25 years of experience in supply chain management with expertise in tail spend management, cost management, performance reporting, services procurement, workforce management and staffing. He is a strong leader in leveraging technology to deliver strategic gains and has consistently created transformational value for several Fortune 1000 and mid-market companies. Sandeep is currently a Charter Member of TiE, and has served on numerous Boards including the Georgia Minority Supplier Development Council and Technology Association of Georgia (TAG).