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Essential actions to create a successful supplier diversity strategy

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Redirecting spending to businesses owned by underrepresented groups addresses inequality and creates a more inclusive economy. If that wasn’t incentive enough companies with higher levels of diversity have better financial returns than their competitors (Mckinsey) and “full representation of BME [Black and Minority Ethnic] individuals across the labour market” could boost the UK economy by £24bn, according to the McGregor-Smith review.

Successfully creating diverse supply chains requires a strong strategy so here we look at the most important elements to help your organisation realise the benefits.

1. Clearly define your targets

Your entire organisation needs to agree on a clear and defined vision to work towards. Decide what a diverse supply chain looks like and what steps you will take to get there.

Be specific about the impact you want to create. Does your sector lack representation of a certain group that you’d like to engage? You might choose to address gender equality, anti-racism or the lack of disabled business leaders.

Define in detail the targets you want to reach. Do you just want to increase the percentage of suppliers who are owned by a particular group or do you want these suppliers to be able to access larger contracts and have a bigger percentage of your procurement spend?

2. Get commitment across your organisation

A successful supplier diversity strategy requires buy-in at every level. Engaged leadership gives your strategy weight and credibility but success relies on the roles who carry out day to day work. They are the ones who need to fulfil the targets and implement the processes.

Engaging your workforce is a benefit to them and your organisation. In a survey commissioned by UPS and cited in Harvard Business Review, 52% of respondents said they want to work for a company that has a supplier diversity and inclusion programme.

People in hi vis and PPE  in a tech environment
52% of people surveyed by UPS said they want to work for a company that has a supplier diversity and inclusion programme.

3. Understand and tackle the barriers

Engage and listen to the targeted suppliers early in the process. This will help you identify the barriers that have kept them from accessing opportunities.

Create tailored support and make it easily accessible. Give direct access to expertise. Creating opportunities for suppliers and your workforce to engage with each other is a great way for suppliers and your staff to expand their knowledge and learn how best your organisations can work together.

4. Work with intermediaries to expand your network

You won’t reach new suppliers by communicating with the same or existing networks. Not only can intermediaries help you tackle the barriers previously mentioned but they can give you access to suppliers who might otherwise not come into contact with your organisation.

Look into engaging membership and support organisations, local institutions or specialist companies like Minority Supplier Development UK (MSDUK).

5. Make supplier diversity an essential part of your processes

Having access to more diverse suppliers is good but it doesn’t ensure diverse suppliers are successfully engaged. Make sure your procurement processes and targets ensure staff are engaging diverse suppliers productively whilst lowering any barriers that either side may face.

When onboarding new staff, make learning about supplier diversity part of the training and onboarding process. Give them all the tools and knowledge they need to meet supplier diversity targets.

6. Ensure a productive culture with unconscious bias training

Often the most difficult barriers to identify are within your own company culture. Unconscious bias is common and it can be a big inhibitor to a productive workplace.

You or your leadership could unknowingly be creating barriers just by going about your work as you always have done. Working with independent consultants is the best way to help your whole team understand how to create a positive culture that doesn’t inadvertently restrict the progress of your supplier diversity strategy.


If you want to learn about how social procurement can help you tackle social inequality send us a message to arrange a chat or find out more about our services for buyers.


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