In today’s market, ever-shifting minority populations, economics, and government regulations have caused corporations to turn to minority owned business enterprises (MBEs) to help fulfill their supplier diversity needs and to help build customer loyalty, community commitment, and visibility in the marketplace.
With minority groups becoming a larger percentage of the population, companies are realizing these groups are making a direct impact on the economy. Research from the Hackett Group suggests that “companies who focus heavily on supplier diversity generate a 133 percent greater return on procurement investments than their counterparts.”
Many companies are still challenged by incorporating supplier diversity into their business and fail to reap MBE strategic benefits because they don’t have a secure program in place. Characteristics of a solid diversity program include clearly documented commitment from senior management, specific annual goals for purchasing from an MBE, and having a comprehensive purchasing system and database that tracks supplier diversity performance.
Having a visible diversity supplier program can benefit not only the MBE but increase satisfaction among company stakeholders. It’s a win-win for all.
Top 10 Reasons Companies have Supplier Diversity Programs:
- Supplier Diversity makes a statement about your commitment to equal opportunity and increases corporate ties to the community.
- Strengthens the economy by promoting minority employment and as a result builds up minority communities.
- Allows minority business to thrive and gain competitive edge in the marketplace as well as identifying new opportunities to grow their business.
- Give your company market access to these minority communities
- Positive public image
- Price – Diversity suppliers, on average spend 20% less on their buying operations therefore passing on the savings.
- Federal Reporting Regulations
- Increasing pressure from customers to have diversity programs
- Reduce supply chain risk by having more than one supplier
- Gain access to innovative new services and products.