Advanced Software (return to the homepage)

Does your diversity strategy extend to your supply chain?

16/04/2024 minute read OneAdvanced PR

Diversity is a key priority for all businesses, with our OneAdvanced Annual Trends report revealing that 70 per cent of leaders believe their organisations have a clear strategy for diversity, equity and inclusion (DEI). This only increases in manufacturing, as 93 per cent of large, global supply chain organisations have DEI goals. Common initiatives to achieve these including ensuring women feel more included in the workplace, hiring more diversely, flexible working schemes and empowerment initiatives like solidarity groups for minority employees. However, have these companies looked outside of their workplace and considered diversity across their suppliers? With most organisations closely tied to a network of other businesses, a truly far-reaching diversity strategy should lead by example and drive diversity across a company’s entire sphere of influence. Choosing diverse suppliers expands your DEI strategy to account for how your business interacts with the wider world, demonstrating a genuine commitment to social responsibility. 

Reach for the stars – setting targets 

Harvard Business Review defines a diverse supplier as one that is at least 51 per cent owned and operated by an individual or group that is traditionally underrepresented. This could mean minority and women owned business enterprises (MWBEs), which are in turn 67 per cent more likely to hire minority talent. Strong diversity strategies should include a target number of diverse suppliers, a figure which can be tracked for progress and expanded upon.  

Incorporating this diverse supplier target is not only the right thing to do, but is likely to boost employer brand, as 52 per cent of respondents to a UPS survey said they would want to work for a company that had a supplier diversity and inclusion program. Diversity among suppliers also fosters innovation and creativity, encouraging a wide range of viewpoints and ways to solve challenges. In meeting ambitious diverse supplier targets, businesses are likely to support more, smaller providers, rather than relying on a few monolithic leaders in the field.  Expanding your network for the primary purpose of diversity will result in a wider safety net of suppliers, building in resilience in the face of geopolitical disruptions and natural disasters.  

Facing challenges  

However, businesses can face problems when sourcing diverse suppliers, which is especially difficult in niche markets where there is a lack of specialised producers. However, leaders should see this as an opportunity to lead the industry towards inclusion, as steps towards removing internal barriers for suppliers will help drive diversity in the market. For example, if small MWBEs are struggling with to meet rigorous security protocols or ensure their products reach requirements, your business can choose to support them in their certification process and provide training to help reach the necessary standards. This in turn will boost their trade and kick start their growth journey, with your strategy having a ripple effect of empowerment in the industry. 

There is also the issue of deciding which suppliers qualify as MWBEs. Nestle UK has enlisted the help of Minority Supplier Development UK for ethnic groups, WeConnect for female business owners and OutBritain for LGTBQ+ business owners, to distinguish which businesses count as diverse. Fostering connections with activist groups will help you craft a supplier diversity program that is authentic and driven by minority perspectives. A genuine commitment involves seeking long-term and strategic relationships with diverse suppliers, rather than one-off engagements. This signals stability to the diverse business and encourages further investment on their part. 

Diversity means more than an internal HR box to tick; it's a lens through which every business decision should be filtered – including your supply chain. By creating a strong and diverse supply chain, you are not just meeting a requirement; you are innovating and preparing your business for the challenges and opportunities of the future.