What is supplier diversity and why is it important?
Maybe you have been hearing the word “supplier diversity” but aren't sure what this means? Much like many business terms, the definition and implementation of the words may differ by company. Let's begin with the typical definition, then we'll dig only a little deeper.
Generally, supplier diversity is a small business 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 diverse supply chain that works to secure the inclusion of diverse groups in the procurement plans for government, not-for-profits, and private industry.
Quite simply, supplier diversity describes a supply chain that incorporates businesses owned by diverse individuals or groups. What Is just a Diverse Supplier?
A varied supplier is, in the broadest sense, a business owned and operated by a person or group that is element of a traditionally underrepresented or underserved group. In the United States like, you will 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 living of a supplier as it authenticates that the business enterprise is owned, managed, and controlled by a qualifying diverse group. Certification also opens the entranceway for opportunities to contract with the federal government, that includes a mandate to improve the number of diverse suppliers inside an organization's supply chain.
Entities including 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 give attention to 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.