Ever wondered about the term “supplier diversity” and its implications in the business world? This article aims to shed light on its overarching concept before diving into its specifics.
Supplier diversity, at its core, is a business strategy geared towards ensuring a broad and varied supplier base in a company or organization’s procurement process for goods and services. This concept stresses the importance of creating an inclusive supply chain that promotes the participation of diverse groups in procurement plans across governmental bodies, non-profit organizations, and private industries.
To put it differently, supplier diversity is a concept that embodies a supply chain inclusive of businesses owned and operated by a variety of entities.
Like many other business concepts, the interpretation and application of “supplier diversity” can vary from one organization to another. But, in general, supplier diversity is a strategy that strives to promote a diverse supplier base in a company’s procurement process. It puts an emphasis on fostering a diverse supply chain that ensures the involvement of different parties in procurement plans, whether they are from government, non-profits, or private industries.
Furthermore, supplier diversity represents a supply chain composed of businesses owned by a diverse set of entities or groups. Diversity, in this context, refers to an organization’s efforts to engage suppliers from underserved or marginalized groups such as indigenous peoples, people of color, women, veterans, individuals with disabilities, and LGBTQQIA+ individuals, into their supply chain and sourcing activities.
So, what exactly is a Diverse Supplier? A diverse supplier is a business owned and operated by an individual or a group that typically represents an understated or underserved community. In Canada, examples of diverse suppliers might be a business or nonprofit organization that is at least 51% owned, operated and controlled by Aboriginal peoples, members of a visible minority group, women, those who identify as LGBT+ or people with a disability. Visible minority suppliers are also known as minority business enterprises. For an organization to monitor and report diverse supplier expenditure, it is critical to ensure its suppliers are verified through third-party certification bodies.
Such certification plays a vital role in a supplier’s journey, confirming the business is owned, managed, and controlled by a qualifying diverse entity. Certification also opens doors for potential opportunities with government bodies, which are mandated to increase the number of diverse suppliers in an organization’s supply chain.
Organizations such as the Canadian Council for Aboriginal Business (CCAB) and the Canadian Aboriginal and Minority Supplier Council offer certification programs, placing a significant emphasis on ensuring businesses are appropriately categorized by providing nationally recognized third-party certification services.
