Most businesses are aware of the need for more #supplierdiversity and for strong environmental, social, and governance #ESG strategies to be put in place for the success of their business — and the global economy. But what about the deep benefits a supplier diversity program can bring to your business, the micro advantages that help companies realize true growth and profitability?
In this article, we will take a closer look at the many ways to incorporate #supplierdiversification into your ESG strategy and the many advantages such programs bring to the table for stakeholders.
Understanding the Micro Benefits of a Strong Supplier Diversity Program
Rumors of recession woes have not abated, with many economists predicting an economic decline later this year. Banks are not helping, with the recent banking crisis fueling the recession forecast. Inflation is still on the menu, albeit slowing and supply disruptions are continuing as businesses work toward recovery.
For many companies, this outlook spurs a greater focus on cost-cutting and ensuring agility. One answer, and one that comes with a host of benefits, is to create or increase emphasis on supplier diversification. Here is how and why your company should follow suit:
- Make a Case for Diversification
If you haven’t already, make a business case for a supplier diversification program. A stable #supplychain is a critical element for business continuity and can make — or break — your company’s ability to be competitive. Bringing diverse partners on board can allow you to have a backup in case your primary supplier is unable to perform, and it allows you to create that cushion without alienating your incumbent partners.
HOW TO: Put together an official business case for diversification and note how it ties into your company’s ESG goals or overarching business touch-points.
- Use Reporting to Keep Track of Benefits
Supplier diversity brings more to the table than simple cost cutting. By investing in supplier diversity, businesses can benefit from a variety of advantages, including increased innovation, improved customer service, #costsavings, and more. Additionally, supplier diversity helps to create economic opportunity for #minorityownedbusinesses.
This can lead to a positive impact on the local economy and help to reduce poverty levels in under-served communities. Investing in supplier diversity is an important step for any business that wants to create a more equitable society while also reaping the rewards of increased efficiency and profitability.
HOW TO: Look at more than just your spend numbers. Consider reporting that includes how your suppliers are adopting their own ESG practices and how many use sustainable practice in their daily operations. Consider also any volunteerism and local outreach that your partners use to benefit their local economies.
- Align with Other Business Units for Greater Advantages
Supplier diversity programs offer a wide range of business bonuses for companies that create strong programs. For example, sales and marketing departments can widen your customer base and increase trust and loyalty by focusing on diversity and inclusion.
HOW TO: Taking a closer look at the demographics of your customer base can assist you in creating a program that will bring more power to your sales pitch. For example, if you produce products that are beloved by the Latino community, make sure that the percentage of Latino-owned companies measures up to the percentage of Latinos in your customer pool.
- Keeping Customer Loyalty Alive
If your company has worked hard to gain the trust and loyalty of your audience through programs such as supplier diversity and bringing inclusion to the table, don’t let budget cuts slow your progress. Reducing your diverse pool of partners not only impacts your company’s ability to be agile and responsive to market changes, but also undermines progress you may have made with your ESG goals.
HOW TO: For every budget line item that references a diverse supplier, there should be a consequence noted if that line item were to disappear due to budget cuts.
Help Diverse Suppliers — Help Yourself
Supporting supplier diversity is an important way for businesses to create a competitive advantage. It can help companies increase their customer base, build relationships with diverse suppliers, and gain access to new markets. Additionally, investing in diverse suppliers can lead to improved financial performance and increased innovation. By leveraging the unique skills of minority-owned businesses, companies can gain access to new ideas and perspectives that can help them stay ahead of their competitors. Furthermore, supporting supplier diversity helps businesses demonstrate their commitment to social responsibility and sustainability goals.
Besides the major impacts a diverse supply chain can bring to the business world and global economy at large, it also holds great advantages for the individual companies that choose to adopt such a model. At Quality Imaging Solutions LLC, our status as a certified women-owned and disadvantaged-business can be an asset to our business partners, not only because we represent a way to diversify suppliers, but also because we have built a reputation on providing only the highest quality print and imaging supplies and services to our client base. If you want to learn more about partnering with us, simply contact us today and let’s get started!