Companies can use supply diversity programs to do more than just award contracts to minority-owned businesses, since the approach can also improve vendor relationships, reduce supply chain risk, boost innovation, and cut costs, according to a report from Supplier.io.
The report comes as companies increasingly face new requirements, heightened pressure, and scrutiny over their practices in supply diversity, which describes their records of purchasing goods and services from groups that are owned by minority categories such as women, veterans, disabled, and lesbian, gay, bisexual, and transgender persons.
Despite those benefits, some companies struggle to reach their supply diversity goals, prompting the creation of the “Supplier Diversity Best Practices for 2024 Report,” according to Supplier.io, a Westchester, Illinois-based provider of environmental, social, and governance (ESG) data and management solutions. The study identified best practices for procurement and supplier diversity leaders to follow, based on over 200 survey responses and 30 in-depth interviews drawn from a study of 403 companies across 15 industries with a combined $2.6 trillion in spend data.
The results revealed five best practices to improve supplier diversity:
- Ensure data accuracy – more depends on it now
- Provide more context for results
- Partner even closer with your business unit peers
- Plan even further in advance
- Add more ESG and sustainability to your reporting
“Whether it’s emerging regulations or the growing demand for reducing risk, supply chain is in the spotlight. Supplier diversity programs play a critical role in enhancing supply chain competitiveness amid these challenges,” Aylin Basom, CEO of Supplier.io, said in a release. “With business decisions and investment dollars being allocated based on program performance, companies can’t afford to neglect it – especially when 20% of companies with the highest diverse spend outperform industry peers by 2 - 3 times.”
