Top 10: Strategies to Increase Supplier Diversity

Top 10: Strategies to Increase Supplier Diversity
Supply Chain Digital August 2022
By Roger D. Blumberg & Ashlee Nelson

Long gone are the days when simply finding the right product, service, or component – at the right price and with the required quality – is enough. Other factors are currently keeping procurement leaders awake at night:

  • Do my suppliers apply circular economy principles so that their products are designed for reuse and circulation?
  • Do they employ sustainable and fair production methods, whilst staying within budget?
  • Are my suppliers owned, operated, and controlled by an individual or group that is traditionally underrepresented or underserved?

Increasingly, companies must actively demonstrate that they are guided by Environmental, Social, and Governance (ESG) principles – and that includes every link in their supply chains, which is where supplier diversity becomes so important. Below are ten strategies that will help you start and expand your supplier diversity program.

Increasing supplier diversity: Executive support

Every successful supplier diversity program was born out of a comprehensive strategic plan supported by executive leadership. Creating this framework up front will help you align your organization behind common objectives and empower the growth of your supplier diversity program. But where should you begin? Your supplier diversity objectives and goals should be approved and supported at the executive level in order to earn overall organizational buy-in.

Increasing supplier diversity: Be specific

Diversity means a lot of things to a lot of people. Failing to define your program’s scope and policies up front can result in unnecessary headaches down the road. On a basic level, defining the scope of your program means identifying what diversity categories your program will focus on. For instance, you may choose to focus specifically on small businesses, women-owned businesses, minority-owned businesses, veteran-owned businesses, or some other diverse supplier group. Eventually, your program might grow to encompass many different groups, but defining a clear starting point will help you get things off the ground.

Increasing supplier diversity: Have a champion

Supplier diversity programs won’t survive without a face that is owning and guiding the evolution and growth of the initiative. Ideally, this is a full-time person, but at the beginning it doesn’t have to be as long as you enable him or her with the right data, and technology to help drive integrated and measurable processes across the organization. If you cannot allocate a dedicated person for the role, consider bringing in a consultant.

Increasing supplier diversity: Align supplier & ESG goals

Before you can build a strategic plan, you need to identify the business objectives that are most important to your organization and how your supplier diversity program might influence those objectives. By aligning supplier diversity goals and initiatives with larger business objectives and your overall company mission and values, you’ll earn the confidence of the executive team and stakeholder buy-in, while driving new opportunities to reduce your company’s carbon footprint and overall environmental impact.

Increasing supplier diversity: Leverage data

Take a deep dive into your supply base to see where your suppliers stand when it comes to diversity. Can’t do it yourself? Supplier Intelligence solution providers such as Scoutbee can help you visualize such information and use the intel to build a more diverse, agile, and sustainable supplier portfolio that can withstand current and future demands.

Increasing supplier diversity: Communicate and train

Creating an internal communication plan will help you keep everyone in your organization on the same page about program goals, initiatives, and current challenges. This may mean setting up regular cross-departmental meetings and/or training on how to use a supplier diversity software platform. Along with laying out a clear internal communication strategy, consider also how you’ll communicate with your suppliers, both current and future. As your program grows, maintaining clear and consistent communication with both employees and your supplier base will become even more important. To set your program up for success, create a plan for how your communication process will evolve as your diverse supplier network expands.

Increasing supplier diversity: Enlist the help of a partner

A strategic partner like will guide you through each step listed above and ensure that you create a world-class supplier diversity program. The right partner will also help you build on that foundation after it’s been established so that you continue to evolve in the right direction.

Increasing supplier diversity: Track results

Once the supplier diversity program is up and running, be sure to regularly benchmark your performance towards your objectives with a bi-annual or quarterly revalidation of your supply base via a data enrichment process. This is a critical process to ensure your program is seeing growth, identifying challenges before they become problems and capitalizing on opportunities immediately.

Increasing supplier diversity: All hands on deck

Celebrating your supplier diversity program within your organization should be a priority. Raise your program’s profile, reiterate the company’s commitment to Diversity, Equity and Inclusion (DEI), and normalize supplier diversity within your organization with frequent updates and celebrations of the program’s successes. Remember that supplier diversity is a company-wide endeavor, meaning that everyone in the company is a stakeholder and should be receiving frequent updates. Include metrics and success stories about your program in corporate social responsibility reports, company newsletters, and other internal communications as appropriate.

Increasing supplier diversity: Promote your program externally

Showcase your supplier diversity progress externally by communicating growth and expansion. If you’re updating your goals because you’ve met previous KPIs, that’s cause for celebration. If you’re expanding into a global supplier diversity program, then your marketing team should get the message out in the U.S. and in the new regions where you’re operating.Whether you’re announcing the launch of your new supplier diversity program or highlighting the successes and growth of an established program, you should be working with your marketing department to highlight your supplier diversity progress.