A report released today lists five ways that “best in class” companies enlist more diverse suppliers, boosting their procurement business with minority-owned firms, according to the data analytics provider Supplier.io.
Westchester, Illinois-based Supplier.io conducted its research by teaming with Sourcing Industry Group (SIG), a membership organization that provides thought leadership and networking opportunities to executives in sourcing, procurement, and outsourcing from Fortune 500 and Global 1000 companies.
The result uncovered ways in which “best in class” companies—which achieve the top 20% of supplier diversity spend for their respective industries—operate differently from their peers, according to the paper, “Supplier Diversity Strategies Report 2023: Moving Beyond Best Practices.”
The rewards for that effort can be great, Supplier.io said. Companies that achieve that goal of consistently including small and diverse-owned businesses in their procurement activities can improve their bottom-line results, as measured by decreased supply costs via supplier competition, and better product innovation through the entrance of new products, services, and ideas.
To get there, best-in-class companies ranked higher in five specific areas:
• data-driven accountability: Track metrics at the business unit or product level, and use that data to hold specific teams accountable.
• proactive planning: Start category planning well ahead of time and bring in diverse suppliers earlier and for specific purposes.
• connecting business goals to diversity goals: Tie supplier diversity goals with current business objectives, and build a direct relationship with the supplier diversity team and business leaders outside of procurement and finance.
• collaboration across the company: Focus more on how diverse suppliers can support specific business unit needs while also making it easier for all teams to find and engage diverse suppliers.
• balancing data and relationships: Use data to prioritize specific relationships with business unit teams and diverse suppliers, rather than focus on one or the other.
“Companies are always looking for ways to improve their supplier diversity programs and have been asking for us to provide insights on ‘how’ the most successful organizations are, across industries, achieving greater results. We wanted to go beyond the normal best practices and use data to identify specific actions leaders are taking to achieve better integration of diverse suppliers, increased diverse spend and success” Aylin Basom, Supplier.io CEO, said in a release. “Our new best practices report provides clear ways that teams can optimize the steps they’re already taking to vastly improve their results—without needing additional budget or resources—and more deeply embed diverse suppliers within their growth strategy.”