Why is Supplier Diversity Valuable?

by Obella Marie D. Ronsairo and Francis J. Custodio, OCTOBER 2021

A supplier diversity refers to a supply chain that incorporates businesses owned by diverse individuals or groups. A diverse supplier is, in the broadest sense, a business owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. 

Photo by Clay Banks on Unsplash

Diverse certification is an important milestone in the life of a supplier because it authenticates that the business is owned, managed, and controlled by a qualifying diverse group. Certification also opens the door for opportunities to contract with the federal government, which has the mandate to increase the number of diverse suppliers within an organization’s supply chain. In general, supplier diversity is a business strategy that ensures a diverse supplier base in the procurement of goods and services for 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.

Why should companies make inclusive supply chains a priority?

The reasons range from social responsibility to the bottom line. Ideally, supplier diversity combines the best of our desires for a better, more equitable world and the drive to be a competitive leader in the marketplace. Not only does supplier diversity benefit underrepresented businesses, but it also uplifts the communities where those businesses are located through job creation, increased wages, and tax revenue. This is called economic impact, a metric that demonstrates how valuable supplier diversity is to local economies and communities. Beyond the social responsibility and economic impact metrics, the fact is that inclusive supply chains present a competitive advantage, as progressive organizations that have already implemented an effective strategy have realized. 

A supplier diversity commitment benefits a company because it:

  • Promotes innovation through the introduction of new products, services, and solutions
  • Provides multiple channels from which to procure goods and services
  • Drives competition (on price and service levels) between the company’s existing and potential vendors
  • Allows a company to take advantage of new opportunities for business expansion with the emergence of new consumer needs based upon shifting demographic realities

Thought leadership in supplier diversity benefits everyone because it provides a forum for sharing information, resources, tools, methodologies, and experiences to assist in the growth, expansion, and development of the industry. As we all share our experiences, we enable success within other organizations and, in turn, build a stronger industry and stronger communities with stronger diverse businesses.


What Is Supplier Diversity and Why Is It Important? (cvmsolutions.com)




About the writer:

Obella Marie D. Ronsairo. Loves to feature life and see the beauty of every side of the stories. Have been with the newsletter team for almost two years since becoming part of the MPTSouth family. Gained a lot of fun, experience and knowledge through this growing team and helped her to develop more of her skills in writing and creativity.

Francis J. Custodio. Is a Industrial Engineer who loves to think outside the box.  Also like the saying “Work Smart not Hard”. Always curious and that curiosity led him to join the Southlink Newsletter. Loves to know “what make things tick”.

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