By Ji Hyun Lee
Doing business with minority suppliers is no longer just about social responsibility. Many businesses are realizing that now it's the competitive difference that gives a company its edge. To streamline the process of contracting to women and minority suppliers, here are some best practice strategies recommended by the National Minority Supplier Development Council (NMSDC) and management consultant company Diversity Training Group.
1) Establish Corporate Management Support
A unified effort is crucial to the success of any diversity strategy and the best way to accomplish this is by incorporating it from the top down. "The company CEO must support minority supplier development in order for it to become embedded in the corporate culture of the company. Without C-suite support, success will be limited," says Harriet R. Michel, president and CEO of NMSDC.
2) Develop a Supplier Development Plan
A clearly documented policy should state the company's commitment to women/minority supplier development efforts. The plan should define the scope of the procurement process with detailed explanation of how the program will be managed.
3) Create an Internal and External Communications Strategy
The supplier diversity team should regularly update company staff on the progress of the development initiative— Web site, newsletters and annual reports are some ways of achieving this. External strategy might involve highlighting successful vendor relationships through various public relations efforts— articles in minority-focused publications and attendance at diversity-aimed trade shows could work very well in delivering the message.
4) Mentor Current and Prospective Suppliers
To maintain relationships and build new ones with suppliers, it's important for businesses to provide mentoring and coaching for vendors that show promise. Mentorship opportunities go a long way in succession planning for companies because it helps ensure long-term growth of both minority and majority businesses.
5) Institute a Workplace Diversity Steering Committee
In order for a company to understand the needs of diverse suppliers, they need to understand it from the perspective of the minority-business owner. Having a steering committee dedicated to building diversity within the organization through recruitment and training helps build teamwork towards the goal of doing business with MWBEs.
6) Track the Management of Supplier Diversity Program
Mauricio Velasquez, president and CEO of Diversity Training Group, advises on having an orientation for new MWBEs entering the supply chain. "We should think about keeping a checklist… to help new suppliers, or remind experienced ones, understand how [companies] do business," he says. The suppliers should be well informed about specific standards and needs of its prime. Velasquez says that tracking system should entail regular onsite visits to vendors and meetings with their operations staff to ensure top quality and timely delivery of products. And of course, to keep par with good services, recognizing and rewarding those businesses that excel in its commitment helps in sustaining ongoing partnerships.
7) Establish Accountability and Transparency
These two factors often get overlooked in diversity initiatives but without it, there is no visible benchmark. "Too many companies are allowing their supplier diversity efforts to be diminished to the point where their effectiveness can be questioned," says Michel. "Companies should commit themselves to finding out how minority supplier development relates to their revenue as well as their cost savings."
8) Nurture Second-Tier Suppliers
Though mentorship helps in developing new suppliers, a full commitment to second-tier should be implemented to plan for continued growth of the company and vendor relationships. To that end, second-tier businesses not only accommodate first-tier suppliers but they also help create a multi-layer approach for succession planning.
9) Conduct Frequent Seminars for MWBEs
It's always important for businesses to be up to date on all the new technologies and innovations that are available for faster production and delivery of goods and services. Companies with supplier diversity programs should provide seminars for vendors on the most innovative and cost-effective way of doing business.
10) Active Involvement in Diverse Communities
To successfully establish relationships with diverse suppliers, companies will find it easier to gain respect and trust from diverse businesses if they became active in the community. This can be accomplished through community outreach programs and attendance at minority business and career fairs.
About DiversityPlus Magazine:DiversityPlus is much more than “just” a supplier diversity magazine.Thanks to its strong media platform, which includes the print edition, digital magazine, website, weekly newsletter, social media, blogs, and video, DiversityPlus is able to provide print readers in seven countries and more than 117,000 digital readers worldwide with access to leading-edge supplier diversity content, webinars, and events.
What you’ll read in the pages of DiversityPlus represents the most current and impactful thinking about diverse supplier relationships. Plus, with over 17 years in print, our trend research, interviews, and feature articles showcase a depth of industry relationships unmatched by any other supplier diversity publication.