The Economic Imperative of Supplier Diversity By Felecia J. Roseburgh
state, the region, and the country.
Few people have heard the term “Supplier Diversity”. Even fewer understand the economic value of Supplier Diversity for a community, the
Supplier Diversity is a procurement initiative emphasizing the importance of creating a diverse supply chain of goods and services. The discipline focuses on assuring that minorities, women, veterans, and disadvantaged businesses, are included in the procurement plans for government, not-for-profits, and private industry. There are those that often mistakenly assume that Supplier Diversity is a quota or social program, designed to benefit minorities and women while adding little to no value to the community at large. To the contrary, a robust supplier diversity initiative benefits everyone. Upon my entry to the supplier diversity industry, my mentor helped me understand the value of supplier diversity by using the popular phrase - “a rising tide lifts all boats”. This phrase crystallizes the reality that as the general economy improves, so will the lives of those who participate in that economy. This thinking challenges organizations to develop economic policies that are designed to meet the needs of everyone who will be impacted by those policies. Supplier Diversity does just that - it offers a number of benefits that assist in the development of a diverse supply chain with added economic value for all.
workforce is employed by small business and that small business development provides tremendous hope for the nation’s economic recovery through new job creation. As small businesses grow, so will our nation’s economy. Most diverse businesses are small businesses, therefore as supplier diversity initiatives assist diverse businesses, they aid in the economic recovery of their communities. Diverse businesses offer tremendous promise for a brighter economic future for us all. Finally, a diverse supply chain provides products and services to emerging consumer markets, as it continues to support mainstream consumer needs. While traditional products and services remain available to consumers, demographic shifts create opportunities for diverse suppliers to meet the needs of emerging and/or shifting populations in the U.S. and across the globe. A recent Nielsen report titled “The State of the Hispanic Consumer: The Hispanic Market Imperative” cites the following information regarding the needs and the buying power of Latinos:
Over 52 million strong, Latinos are impacting every aspect of the national landscape including popular culture, the workforce, consumerism, politics and American national identity. The Hispanic market’s size, growing clout, and buying power of $1 trillion in 2010 and $1.5 trillion by 2015 require thoughtful understanding about what the market represents to a company’s bottom line. Latinos are no longer just a sub-segment of the economy, but a prominent player in all aspects of American life.1
A response to this reality means that a diverse supply chain will A diverse supply chain, first and foremost, adds economic value enable companies, governments, and non-profit organizations to because it encourages the growth of diverse businesses. Diverse effectively respond to the fast-growing and globally expansive Latino businesses typically encounter barriers that challenge their start-up consumer base. and sustainability. Impediments to diverse business success include Supplier Diversity is not focused on giving a “hand-out”, but rather access to capital for business expansion; bonding to qualify for public projects; mentor-protégé relationship development; technology a “hand-up”. It engages diverse suppliers by supporting firms who are integration; and access to information & resources that are critical ready to do business in today’s ever-changing global marketplace. for day-to-day operations. Effective supplier diversity initiatives can As the “rising tide lifts all boats” so shall the rising tide of supplier diversity success lift our nation to greater levels of economic growth assist in these areas. and stability. I hope my tenure as Indiana’s supplier diversity leader As a second benefit, a diverse supply chain assists the country allows more boats to float on the rising tide of business success. in job creation. U.S. statistics show that nearly 50% of the U.S. Felecia J. Roseburgh is Deputy Commissioner of the Minority & Women’s Business Enterprises Division for the State of Indiana. For more information on Indiana’s Supplier Diversity Program go to www.in.gov/mwbe. The Nielsen Company. (Quarter 2, 2012). The State of the Hispanic Consumer: The Hispanic Market Imperative. Retrieved May 29, 2012, from http://nielsenclients.peachnewmedia.com/EdutechResources/resources//bytopicid/36498/State-of-the-Hispanic-Consumer.pdf 1