- UN Women have issued a suggestion-filled toolkit to aid procurement professionals in narrowing the international gender gap, Supply Management reported last week. The goal of the toolkit is to support women-owned businesses as viable supply sources.
- Businesses seeking gender diversity within their supply chain can refer to the toolkit to define the terms of eligibility in order to avoid fraud, falsity, and tokenism when looking for female suppliers.
- A business may be considered "women-owned" only if 51% control lies with one or more women, if a woman or women control long-term decisions affecting the company, and if the company retains independence from any other business not owned by women.
Although women now own roughly one third of all businesses across the globe, and manage approximately $20 trillion in consumer spending each year, they receive less than 2% of annual corporate procurement spending.
Yet companies that do not source from women-owned suppliers miss out on a multitude of opportunities, according to the toolkit. For example, 34% of companies that add women-owned suppliers as sources report a positive result, while 33% reveal a greater return on the cost of procurement in particular. Further, companies with a wider diversity of suppliers report spending roughly 20% less on buying operations.
Another benefit of sourcing from women owned suppliers is the increased buying impact it brings. The Women’s Business Enterprise National Council has demonstrated that when women learn a company sources from women-owned businesses, at least 78% will make their first purchase from the company in question, while 80% will continue purchasing from said company, and 50% will be more open-minded in her expectations of the product.
Risk and resilience are also enhanced by a diverse supplier base. Varying suppliers increases innovation through the entrance of new products, and drives competition for price and service quality between old and newer vendors. A small supplier may also allow for smaller orders, specialized products or critical services, all of which can be accessed more quickly, and often for a better price. Finally, variety allows for wider market penetration and the resulting diversity in customer base. It can also improve a company's reputation, earning loyalty, especially from female customers, who have been shown to care more about social responsibility issues, including eradicating gender inequality.