The Procurement and Supply Manager's Desk Reference, + Website, 2nd Edition

CHAPTER 6

Supplier Diversity

The concept of supplier diversity programs to support economically disadvantaged groups in the United States was born from the American sense of fairness and equality, and supported by numerous government-sponsored programs that have been legislated into law. But many of us are not familiar with the nature and benefits of a diversity supplier program and, importantly, many do not fully understand how their organization can support and benefit from these programs.

As it relates to sourcing management, supplier diversity programs expand the organization's supply base by developing new sources of sustainable supply as a means to expand competition. Diversity programs support a supply base that is generally more representative of the community than without such programs. We call this process “inclusion.” Fostering inclusion supports the economic welfare of the community and promotes the availability of a viable workforce. Thus by increasing the diversity of the supply base, we also increase its overall health. That is why we chose to include the process in our examination of best practices in sourcing management.

To be effective in developing a supplier diversity program, most organizations fund a comprehensive annual supplier diversity operating budget. The goal of the budget is to execute stated long- and short-term objectives for the inclusion of a diverse supply base for sourcing. Usually, cross-functional teams within the enterprise are assembled ...