THE STATE OF SUPPLIER DIVERSITY PROGRAMS IN CANADA Paul D. Larson, Ph.D., CN Professor of SCM, University of Manitoba Jack D. Kulchitsky, Ph.D., University of Calgary Silvia Pencak, M.A., President, WBE Canada
attracting investors, are among the least important SD motivators.
The Institute for Supply Management (ISM) includes “Diversity & Inclusion” among its Principles of Sustainability and Social Responsibility. Buying organizations are advised to “develop and implement practices that identify and develop supply management employees and suppliers from diverse and underrepresented populations.”1 Aside from its link to social responsibility, there is a business case for supplier diversity (SD). By encouraging competition and broadening the supply base, SD can result in better quality of purchased goods and services, as well as lower costs.2 This article presents selected results of a recent survey of Canadian buying organizations, on barriers, facilitators and motivators of SD in Canada.
The top two barriers to SD – difficulty in finding qualified diverse suppliers and concerns about their ability to perform – imply a critical role for certification councils, such as WBE Canada and the Canadian Aboriginal and Minority Supplier Council (CAMSC). Leading facilitators of SD appear to be internal to buying organizations, e.g. presence of diversity champions and commitment of the leadership. CAMSC and WBE Canada are in the middle of the pack of facilitators. Interestingly, Supply Chain Canada, the nation’s premier purchasing/supply chain professional association, is the lowest rated facilitator by a substantial margin.
While 31 percent of the survey respondents have full or “complete” SD programs, 44 percent have “limited” (initial or partial) programs. Elements of a complete program include supplier mentoring, tracking SD spend and focusing on both first- and second-tier suppliers. Limited programs have only gone as far as having a SD policy, training staff, joining a diversity council and/or including SD among their RFP criteria. Another 22 percent of buyers in the sample have no formal program but are guided by the principles of equal opportunity and anti-discrimination.
American connection and program status At about 32 percent each, the respondents represent an equal portion of Canadian companies with no foreign (parent or subsidiary) connection and Canadian companies with an American parent. Another 16 percent of the respondents represent Canadian government buying organizations. The table shows a cross-tabulation of SD program status and organizational connection to the United States, as a subsidiary of or parent to an American company. Canadian organizations with American ties are expected to be closer to full implementation, since SD programs first emerged in the United States during the 1960s. “EO-only” organizations have no formal SD program but do follow the principles of equal opportunity.
According to the survey, the three most important motivators of SD are aligning with organizational culture, bringing benefits to diverse communities and broadening corporate social responsibility (CSR) programs. Traditional performance indicators, such as reducing costs, increasing sales and profits or
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