Category Management: Supplier Diversity 2.0


We just spoke to a prospect regarding their Supplier Diversity program and I was reminded of something that we had started to talk about pre-COVID. In fact, COVID stopped a benchmarking research project we were about to launch called “Reimagining Supplier Diversity – SD 2.0”.

As you know, the topic of Supplier Diversity (SD) has taken on a very heightened awareness these days across all companies – it’s no longer a “nice to have” but a Must.  It is obvious that we need to rethink the whole concept of Supplier Diversity and how to make it more effective.  Here are the salient points we used to describe SD 2.0 to the prospect:

  • Multiplier Effect -NOT just the spend we put through diverse suppliers: we need to focus on the Multiplier Effect we can have throughout the supply chain (e.g. partnership with local banks for loan programs, local employment programs synergy, going deeper than Tier 2 etc.).   How to create a Multiplier Effect so that the impact is far, far greater than the spend that we put through diverse suppliers (that is from the days of “Three Bids and a Buy” purchasing😊). 
  • Intersection and Integration of Category Management AND SD – This is probably the most obvious and yet most elusive. There are many a Category Management template being used by many clients out there still where there is nary a mention of SD.  And if there is, the Adoption is still lacking.  That’s the bad news – the good news is there is lots of progress being made.  To identify the nexus between Sourcing/Supply Chain/Category Management is acknowledgement of the fact that the success of any SD initiative is buried in that nexus.
  • PULL vs. PUSH – An oldy perhaps but a goody – Unless and until we can create a “Pull” from the decision makers, the chances of success are greatly diminished. “Push” can only take us so far and never to SD 2.0
  • Becoming a competitive advantage (B2C, B2B, Regulators, Policy makers, Employment market, etc.) – Consumers and Business make choices today based on how companies align with their social principles, as are the other Stakeholders mentioned influenced by our SD accomplishments. These competitive advantage needs to be embraced and articulated and “sold’ to the various Stakeholders.  That is what will create the PULL
  • Active ownership by leadership – not a semiannual program update – If SD is not on the goals that the Executives are measured on, then we can’t call it active ownership? And by the way, to accomplish this, see the bullet above
  • Strategic Competencies necessary – Getting this done is all about Change management and consulting skills and just wanted to remind everyone of that 😊
  • MUST be a Stakeholder Value Driver (QDC) – this goes right back to the bullet above regarding SD being a competitive advantage. Only then will SD be a Value Driver like Quality, Delivery, Cost (QDC), etc.

You may start by asking yourself the following questions:

  1. What are your executives, customers, employees, community leaders and maybe even regulators demanding from Supplier Diversity?
  2. Do you have a plan in place to “up your game” in SD to become a competitive advantage for your organization? What does that plan look like?
  3. How is Supplier Diversity integrated into your Sourcing / Supply Chain / Category Management processes today?  What would you like to do differently in the future?
  4. Is your Supplier Diversity program on the personal agenda of your CEO and his/her leadership team?  If so, how is that working?
  5. What is your organization doing to increase diverse supplier engagement – with current suppliers and finding new diverse supplier sources?

If you would like to know more about SD 2.0 or share your thoughts on it, just reach out 😊.


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