As a business owner, you’re always looking for ways to improve your company. You invest in the latest technologies, your buildings and equipment are efficient and functional, and you only hire the best and brightest. But, are you as diverse as you can —or should — be?
Surely you have anti-discrimination policies in place and you employ a variety of people from different races and cultures. The question is: Are your suppliers diverse?
Many companies have implemented supplier diversity programs, which help them find suppliers that have been historically disadvantaged for various reasons. A supplier diversity program will partner your company with businesses that are owned and/or operated by women; African, Hispanic, Asian and Native Americans; gay and lesbian individuals; and veterans. It will also connect you with companies that may have been overlooked because of their size as well as those located in economically distressed areas.
“Supplier diversity programs are great social and economic development tools,” says Peter Wiersma, the manager of the supplier diversity program at Technology Integration Group (TIG). “If you have a diverse customer base, you can boost business by supporting the demographic groups of your customers. Plus, supplier diversity shows social responsibility — it is the right thing to do for your company and the community.”
Smart Business spoke with Wiersma about supplier diversity programs, how to implement one and why they’re so important in today’s business world.
What makes a good supplier diversity program?
First and foremost, you have to have complete commitment to the program from the owners down to the employees. If you don’t truly support supplier diversity, the program will never work. It often helps to tie in your supplier diversity program with an overall strategic plan to make the company more diverse. When you do implement a plan, establish goals for working with diverse suppliers. These goals don’t necessarily have to be sanctioned and monitored like other company goals, but they will help your program stay on track. Also, select an upper-level manager to run and monitor the program.
Create and maintain a comprehensive database that not only tracks how diverse your suppliers are but also determines what suppliers you should target in the future. Finally, you’ll want to promote your supplier diversity program on the company’s Web site, complete with information on the program, what companies you’ve worked with and what specific products and services you’ve purchased.
What benefits can a supplier diversity program offer?
As markets have changed due to the diversity of America, supplier diversity programs have become a part of many corporate marketing strategies. A successful supplier diversity program will enhance your company’s presence in the market, while strengthening your supply chain and boosting your image in the community. A supplier diversity program isn’t just the right thing to do; it’s also a value-added way to fortify your company. The programs are most successful when they help your organization find new business. By partnering with diverse businesses, you’ll not only grow your company, you’ll help lesser-known businesses become economically viable. It helps your economy, the local economy and the country’s economy.
What is involved in implementing a supplier diversity program?
To take advantage of a supplier diversity program, your company first has to be certified by the National Minority Supplier Development Council (NMSDC) or other certification organization, generally state
or local government agencies or the U.S. Small Business Administration (SBA). The NMSDC — the leading private sector supplier diversity organization comprised of major corporations — has standardized procedures to assure consistent and identical review and certification. The certification process is long and arduous — you respond to questions and provide supporting documents that result in a 6-inch stack of papers establishing that the company’s qualifying owner(s) exercise unrestricted ownership, management and control of the business. You’ll also have to disclose personal as well as your company’s financial records. It’s a very probing process, and some companies are scared off by it. But, it’s definitely a process worth going through. Once your company is certified, the NMSDC or SBA will help you grow and nurture your program. If you are successful, you can become a national strategic sourcing partner. From there, you’ll be partnering with diverse suppliers across the country.
What consequences can companies see from not implementing a supplier diversity program?
If your company is owned and/or operated by any of the minority groups discussed and you don’t have a supplier diversity program and you’re not part of the NMSDC, you’re facing the obvious consequences of missed opportunities to grow and develop your company. If you’re not minority owned and/or operated, you should implement a supplier diversity program, but there are things to watch out for. The most important thing is to be completely honest about your company. If you falsify information, you’ll face a heavy downside, including fines, penalties, and the loss of current and future business.
If you don’t implement a supplier diversity program, you are not availing yourself of the resources available to grow your company. You potentially face the consequences of a stagnant business, a company culture that isn’t diverse and doesn’t grow, and the loss of potentially lucrative partnerships that you can only obtain through a supplier diversity program.
Peter Wiersma is the manager of the supplier diversity program at Technology Integration Group (TIG). Reach him at (858) 566-1900 x4340 or [email protected].
