Supply Chain

No Leadership Complacency Allowed: Leveraging Diversity in the Supply Chain

Companies are revitalizing their supply chains to include diversity and address competitiveness. They depend on their leaders to perform, but how do managers know they are getting top performance from a diverse supply chain? Supply chains get stale, and it is because leadership gets stale first. — By Cecil Perang

Supply chain leaders can get comfortable. They begin assuming that offering a diverse supplier registration portal and requiring diverse supplier participation in all RFPs is good enough, meaning supply chain leadership is not working to maximize the full value of diversity. It just "happens." The difference between mediocre leadership and leadership that develops and manages an innovative, diverse and thriving supply chain is the latter manager unceasingly and proactively leverages diversity.

Diversity can be a key driver of successful supply chain performance, but the reality is that diversity in the supply chain often remains a "placating strategy" to convince people the business is socially relevant. It comes down to leadership, accountability and metrics that hold businesses responsible for performance.

The bottom line is that supply chain managers are the people in the organization who must have an in-depth knowledge of almost everything that goes on in the business, and their leadership impacts everything from cost control to customer service to diversity. Effective supply chain leaders look at the big picture, integrating diversity in the supply chain as a path to success.

Avoiding the Path of Least Resistance
Ezra Pound gave us a truism: When two men in business always agree, one of them is unnecessary. The point is not to insult men but to point out that people who have the same perspectives are less likely to contribute anything new.

A leader that builds a diverse supply chain, but limits the ability of diverse suppliers to contribute knowledge and unique perspectives, gets similar results. The suppliers become like the two men in business. The suppliers forge a path of least resistance, probably doing a good job of delivering goods and services and meeting all contract stipulations but unable to contribute diverse perspectives.

Where are the new ideas, the innovation, and the creative problem solving? Supply chain leaders can let things "just happen" without proactively capturing the full value diversity offers. An effective leader empowers suppliers by implementing a number of best practices that build supply chain strength. These practices include developing supplier relationships – employer/buyer-supplier and supplier-supplier – and developing a communication system that assists, rather than impedes, the flow of new perspectives and creativity.

Diversity for diversity's sake is short-sighted, leaving unrealized value. Best practices, like promoting collaboration among suppliers, also includes leadership behaviors like holding suppliers self-accountable for performance at every contract stage, adopting new operational strategies to maximize supply chain performance, and creating new opportunities for diverse suppliers. Tools like metrics and dashboards play an important role.

Diversity can remain "hidden" in large supply chains. A great leader ensures diverse suppliers of all sizes have regular opportunities to meet buyers and managers in the units benefitting from the supplier's performance. Diverse suppliers are invited to join project development and problem-solving teams.

Leading and Not Just Managing
There is a difference between managing a diverse supply chain and leading one. Gartner looked at various companies to find the advanced practices and capabilities of supply chain leaders. The key findings of the "Gartner Supply Chain Top 25 Spotlights Leadership" shed light on best practices that make the difference between a mediocre leader and a competitive leader who values quality in the supply chain.

First, personalize at scale by assessing the supply chain's capabilities to deliver personalized offers in segments where they differentiate the business competitively. The assessment can identify new opportunities for all suppliers, but diverse suppliers can lead an organization to new underserved markets and bring critical knowledge of diverse communities.

Gartner also recommends supply chain partners develop partnerships with other companies and non-corporate organizations seeking similar outcomes, like improving efficiency, promoting innovation, and delivering on corporate social responsibility. In the diversity arena, it means taking advantage of the resources and connections of organizations like the National Minority Supplier Development Council (NMSDC), the Women's Business Enterprise Council (WBENC), the local Chamber of Commerce, faith-based organizations and others.

Supply chain leaders are encouraged to develop purpose-driven supply chain organizations, and diverse suppliers can play key roles. Gartner's report gives several examples of purpose–driven partnerships. Dell chose to orient its whole supply chain around serving customers by developing sustainable solutions. The vision is to leave a "Legacy of Good." Dell partnered with NGO NextWave and companies like General Motors to reduce ocean plastics.

Smaller but More Adaptable
One of the qualities of smaller diverse suppliers that some organizations overlook in their supplier assessments is the ability of the smaller suppliers to adapt more quickly to changes in the market, new technologies, and fluctuating economies. Strong supply chain leaders refresh their supply diversity efforts periodically to avoid complacency and to help diverse companies and communities experience economic growth.

Strong supply chain leaders refresh their supply diversity efforts periodically to avoid complacency and to help diverse companies and communities experience economic growth.
The "AT&T Believes" initiative is a good example of an effort to drive greater impact with the supplier diversity program by strengthening alignment of the program with social and philanthropic innovation. The initiative aims to stimulate diversity job growth, foster growth of diverse suppliers and create opportunities for diversity technical development. AT&T is also strengthening its tier 2 program in order to get more diverse suppliers into the supply chain.

Diversity in the supply chain has long ceased to be a social program effort, instead becoming critical to the ability of an organization to compete and remain sustainable. The only way full supply chain value is generated is through forward-thinking supply chain leadership. The successful managers and executives develop strategies that enable diverse suppliers to contribute to customer success beyond simple delivery of goods and services.

The supplier diversity program never languishes. It is monitored, assessed for performance, and periodically refreshed to maximize outcomes. Proactive leadership develops best practices that consider diverse supplier impacts internally and externally on communities. Successful leadership leads to a thriving diverse supply chain that is at the core of everything the company does.