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Core Objectives for Successful Supplier Diversity Programs

The maturity of supplier diversity programs varies widely among organizations, but the primary objectives remain constant. They center on alignment to corporate culture and social responsibility while adhering to customer and government requirements, and developing a strong supply base to meet each company’s goals on cost, quality, and growth.

75 percent of respondents have a supplier diversity strategy for the organization overall; 40 percent have a supplier diversity strategy specifically for marketing/advertising.

57 percent of respondents classify the maturity of their supplier diversity strategy as “established,” 23 percent are “advanced;” only 20 percent are “beginning.”

Source: “The Power of Supplier Diversity,” ANA, 2020

Diversity ClassificationsEffective supplier diversity programs require procurement teams to track and manage Tier 1 and Tier 2 spend data within distinct supplier classifications. Managing spend within these diverse classifications is faster, easier, and more efficient when a technology solution has been deployed across the enterprise.

New regulations requiring clear, measurable supplier diversity targets are a strong driver for companies to establish concise enterprise methodologies. Aligning on a standardized approach improves the consistency of supplier master data, the monitoring of supplier certifications and diverse status, and the accurate reporting of all procurement spend.

Achieving High ROI from Supplier Diversity

When marketing and procurement professionals discuss supplier diversity, talks are generally focused on identifying diverse suppliers across multiple commodities or categories of spend, and accurately tracking and reporting expenditures.

For marketing, these categories might include creative and media services, digital, agencies, postage, and production of direct mail, promo, packaging, and point-of-purchase materials.

Supplier diversity and supplier inclusion has risen to the point where they should be incorporated into overall sourcing and supplier management practices. Adopting this approach leads to improved collaboration and innovation, and contributes to the bottom line.                                                                              

Source: Gartner Supplier Diversity and Sustainability Survey

Ultimately, every organization can experience the high return on investment that diverse supply chains yield. With today’s emerging tools, marketing groups have an ability to provide a big-picture view of the ways their marketing campaign spend align with corporate budgets and social responsibility goals.

Managing Transactions and Expenditures

Effectively managing diverse supplier expenditures can be problematic without the right tools and processes. When organizations are working with hundreds or thousands of suppliers and only a portion of them are designated as diverse, gathering transactional and spend data can be time consuming and may become inaccurate when extracted across disconnected data sources.

Traditional reporting practices for supplier diversity range from the use of simple spreadsheets and internal databases to implementing a full suite of technology solutions that simplify diverse supplier sourcing and diverse expenditure reporting, and improve overall supplier data management.

In the third and final installment in this series (available next week), we’ll go deeper into why reporting and visibility are key in maintaining supplier diversity and how marketing teams can benefit significantly from implementing marketing execution cloud technology.  You can view the first installment of this series here.




Ken McDonald is the founder of SourceSCM Consulting LLC, dedicated to partnering with businesses to drive cost optimization, accelerate organizational transformation, and execute innovative, customer-focused solutions. A trusted sourcing and supply chain expert with 30 years of Fortune 6 leadership experience, Ken focuses on sourcing, negotiations, contracting, supplier relationship management, risk, compliance, supplier diversity, distribution, and logistics operations in highly regulated industries. He began his career in retail and moved from there into lead roles in manufacturing and distribution. Ken volunteers as a sports coach and with various groups benefiting children’s charities, food banks, and struggling families.