Supply Inclusion Programs — Broaden your supply base, while advancing your company’s diversity agenda
DIVERSE SUPPLIERS ARE ESSENTIAL AND TRENDING IN THE SUPPLIER MARKETPLACE
More and more larger companies are looking to do business with diverse centric suppliers. Leaders in this trend include the Billion Dollar Roundtable (BDR), composed of 28 Fortune 500 companies. Each of the BDR companies spends at least $1 billion annually with minority- and women- owned suppliers. And their total diverse-supplier spending grew by more than 150% over the past decade (from Diverse Suppliers Are Becoming Crucial Links in Corporate Supply Chains, 2021).
Supply chains are acutely aware that diversity matters, taking initiatives to implement diversity, equity and inclusion (DEI) programs into their businesses. According to a recent 2021 survey of 298 supply chain professionals conducted by Gartner Group and the Association for Supply Chain Management, 59% of surveyed supply chain organizations reported having some form of objective to improve any dimension of DEI, and 23% of those organizations have formal target or goals included in management scorecards, (see Gartner Survey Finds Over Half of Supply Chain Organizations Have DEI Initiatives, But Only 23% Commit to Formal Targets).
WHY CONSIDER A SUPPLIER DIVERSITY PROGRAM?
- Diverse businesses are beneficial to our economy.
- Being in a Supplier Diversity Program amplifies your overall business, providing new business opportunities.
- Diversity promotes both innovation and competitiveness into the marketplace.
TAKE ADVANTAGE OF THE SUPPLIER MARKET TO GAIN COST REDUCTIONS VIA SUPPLIER INCLUSION
Supplier inclusion opportunities extend beyond your primary supplier (Tier One). Often, your Supplier, whether a certified MWOB supplier or not, can provide inclusion information for their suppliers (Tier Two) which meet the supplier diversity criteria. This allows your company to expand its total inclusion spend through the entirety of the supply chain thus increasing its inclusion quotient. If you are unsure about the make-up of supplier diversity in your Tier 2 bracket, request a list of vendors in Tier 2 that have implemented certified diversity programs. You can also invite suppliers to register as a certified diversity supplier online via your company website, encouraging them to consider the practice.
CCM’S FIVE STEP APPROACH TO SUPPLIER INCLUSION PROGRAM
Chase Cost Management (CCM) can help with design, implementation and tracking of your supplier inclusion program through our five-step approach, which includes:
LOOK TO CCM FOR FURTHER EFFICIENCY AND SAVINGS INITIATIVES
Cost saving is not just confined to the price paid but to the total cost for materials or service procured and the diversity of your supply base.
It is not uncommon for companies to already have some percentage of the supply base already allocated to diversity. This is done without knowledge of the supplier’s status and/or their supplier partners (Tier 2). This can become the foundation to build your program upon.
That is why supplier metrics are important to identify within your diversity charter. Some of the more commonly used metrics for measuring performance include total procurement spend with diverse suppliers, percentage spend with diverse suppliers in relation to the total procurement spend, and the number of contracts with diverse suppliers.
COUNT ON CCM TO:
- Provide an honest and fair assessment of your company’s supplier inclusion potential.
- Have a supplier neutral approach. Our only obligation is to our clients.
- Use well defined and measurable goals in our recommendations for a future Supplier Inclusion program.
UNCOVER YOUR HIDDEN SAVINGS
Contact CCM to schedule your no cost consultation.
Authored by Bill Wallack, Procurement Strategy, Chase Cost Management