Maybe you have been hearing the term “supplier diversity” but aren't sure what it indicates? As with many business terms, this is and implementation of the language can differ by company. Let's start with the general definition, then we'll dig only a little deeper.
In general, supplier diversity is a company strategy that ensures a diverse supplier base in the procurement of goods and services for just about any business or organization. It emphasizes the creation of a varied supply chain that works to secure the inclusion of diverse groups in the procurement plans for government, not-for-profits, and private industry.
Put simply, supplier diversity describes a supply chain that incorporates businesses owned by diverse individuals or groups. What Is really a Diverse Supplier?
A varied supplier is, in the broadest sense, a company owned and operated by someone or group that is part of a traditionally underrepresented or underserved group. In the United States for example, you can find approximately 16 categories used to identify diverse businesses. Common examples are small-business enterprises (SBEs), minority-owned business enterprises (MBEs), and woman-owned business enterprises (WBEs). In order for an organization to record and report diverse supplier spend, it is important to ensure that its suppliers are certified through third-party certification agencies.
Diverse certification is a significant milestone in the life span of a supplier as it authenticates that the company is owned, managed, and controlled by way of a qualifying diverse group. Certification also opens the doorway for opportunities to contract with the us government, which has a mandate to increase how many diverse suppliers within an organization's supply chain.
Entities such as the Women's Business Enterprise National Council (WBENC), the National Minority Supplier Diversity Council (NMSDC), the National LGBT Chamber of Commerce (NGLCC), and the U.S. Department of Veterans Affairs Vets First Verification Program focus on ensuring that businesses are appropriately categorized by offering nationally recognized third-party certification services. Regional councils and state and local governments also provide certification services.