3 minute read
Diversifying Your Supply Chain is Good for Your Business
BY SHAVONNE WHITE
TO REMAIN RELEVANT in an increasingly competitive global business market, customers and clients will require diverse and robust supply chain options. Shipping delays combined with inconsistent product availability frustrate customers while stifling profit margins for businesses representing every sector. Now is the time to make a commitment to investing in diverse suppliers—business enterprises owned and controlled by minorities, women, veterans, and individuals with a disability. Supplier diversity is a best practice that is rapidly becoming a business necessity. Effective supplier diversity promotes healthy competition while increasing your network and attracting new customers. Supporting diverse businesses also fuels a diverse workforce.
Diverse suppliers offer different perspectives, drive innovation, and stimulate creative approaches that are likely to influence customer expansion and loyalty. Suppliers are also consumers, and like customers and employees, appreciate inclusion. Many have an expectation that they be representative of the companies where they choose to do business. Diversifying your supply chain will likely infuse capital into your bottom line and is a clear demonstration to your customers and employees that you support people and the broader community.
Minority-owned businesses generate more than $400 billion to the economy and help to retain or create 2.2 million jobs each year. They also contribute $4.9 billion in annual revenue to local, state, and federal tax authorities, according to the National Minority Supplier Development Council.
A growing number of large and small businesses recognize the economic benefit of diversifying their supply chain. Retail giant, Target increased their spend with diverse suppliers by 64.4 percent between 2016 and 2018. The company spent $1.4 billion with tier-one diverse suppliers in 2019 and pledged to spending $2 billion with Black-owned businesses by 2025.
Committing to inclusive procurement practices and deliberately developing a supplier diversity program should be a priority regardless of the size of your business. How can your company start? Begin with an understanding that your leadership team drives company culture. Include employees at all levels in the planning process, incorporate diversity metrics in your existing goals, and monitor and acknowledge performance to ensure your program is effective and has the” buy-in” of all employees.
The Delaware Office of Supplier Diversity’s mission is to increase economic opportunities for diverse business and small business enterprises. We can support your company’s commitment to implementing a supplier diversity program into action. Our office maintains a directory of business enterprises owned and controlled by minorities, women, veterans, and individuals with a disability. The directory is a complimentary resource your company can use when seeking diversity in your supply chain. The directory of certified businesses and additional information and resources related to supplier diversity can be found at business.delaware.gov/osd. Please don’t hesitate to reach out to our office for guidance on your supplier diversity plan or if you have any other questions about how your business can diversify its supply chain. We are here to help.
Shavonne White is director of the Delaware Office of Supplier Diversity.
