- A recent Supplier Diversity Study conducted by The Hackett Group revealed that, contrary to executive expectations, sourcing from diverse suppliers either met or exceeded company predictions of success, especially in the realm of access to new markets, Supply Management reported Tuesday.
- Though concern regarding diverting attention from other strategic activities formed part of initial company reluctance to pursue diverse sourcing, in fact, the results were so successful that roughly 40% of companies enacting supplier diversity programs intend to take the program global.
- Avoiding diversity can even lead to lost business, such as when a customer contract insists that minority-owned, female-owned, LGBTQ-owned or disabled-owned suppliers, along with typically under-utilized and smaller businesses be included in sourcing protocols, and a manufacturer does not comply.
Diversity within sources tapped by supply chain managers has a greater impact on business than previously believed. Formerly, supply chain managers were forced to consider cost over value and to rely on overly- restrictive criteria that ruled out all but the most predictable sources. Also, the like-with-like theory, wherein businesses tend to choose similarly sized as partners and associates, drove uniformity.
Today, a wider, more diverse customer base means that an expectation of variety among sources exists as well. This also extends to the area in which a company operates; demonstrating an eagerness to do business with sources with which your customers are familiar is highly advisable from a public relations perspective, and displaying the variety of sources from which you source can help build a closer relationship with your customers.
Finally, diversity in innovation matters. Smaller suppliers often allow for more fluidity within their methods, meaning that creativity can not only flourish but also be shared. CHI Research has noted that roughly 13 to 14 times more patents are issued to the employees of small businesses, meaning that you're more likely to see newer ideas from a diverse supplier, which is almost always to your benefit.