Supplier Diversity

Supplier Diversity Needs to Be on Your Radar Screen

Being successful as a company is often about having a keen understanding of the marketplace and its customers. That means developing a diverse supplier base that reflects the marketplace and communities that a business serves and tapping into the energy, creativity and fresh perspectives that minority, women and disabled veteran owned businesses (collectively MWBE) can deliver.

Supplier diversity used to be viewed as simply fulfilling one’s social responsibility. But that is a narrow view as many companies also see a significant financial benefit as well. Engaging MWBE’s can drive down your operating costs as they price their goods and services more aggressively and operate with less overhead than larger, more established suppliers. This has been proven in new research conducted by the Hackett Group that showed that a “heavy focus on supplier diversity generates a 133% greater return on procurement investments than the typical business”.

The adoption of MWBE purchasing programs has grown steadily over the last three decades despite ups and downs in the economy and the push to outsource more work to such markets as India and China. Part of the steady growth is that by engaging diverse suppliers you often create sales opportunities as many companies require their suppliers to support their diversity efforts through their own purchasing programs. This has come to be a very important bid requirement especially in businesses within broad based consumer markets such as health insurance, telecom and consumer goods.

During my tenure at WellPoint, Inc., we worked hard to build our MWBE program, more than tripling our qualifying spend in just three years. That took a dedicated effort and a number of initiatives to get us to that point. Let us help you develop a leading edge Supplier Diversity program or take your existing program to the next level. Contact AES Consulting via phone at 609-306-8176 or use our online form.