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Extend the principles of diversity and inclusion to your company's suppliers
Many people are familiar with the importance of ensuring and advancing inclusion, equity, and diversity amongst their employees and managers. But do your efforts include supplier diversity—an equally as important and essential part of any holistic diversity effort?
In Supplier Diversity For Dummies, nationally recognized small business strategist and economic inclusion and supplier diversity expert Kathey Porter delivers an empowering and informative guide to implementing this integral part of any robust inclusion initiative: supplier diversity. You'll understand the relevance of supplier diversity and why it's important to encourage equal opportunity for diverse suppliers and businesses owned and managed by underrepresented groups.
In this book, you'll also find:
Perfect for company buyers, purchasing and procurement professionals, material management executives, strategic souring professionals and supplier diversity practitioners, Supplier Diversity For Dummies is a must-read resource for supply chain professionals, diversity and inclusion leaders and anyone looking to increase their proficiency in supplier diversity, improve supply chain inclusivity and increase their social impact.
Kathey Porter is an award-winning small business strategist and supplier diversity expert. She is the founder of Porter Brown Associates, a professional services consultancy that works with corporations and public entities on building supplier diversity programs. In 2020, Kathey launched the Supplier Diversity Training Institute.
Introduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 3
Beyond the Book 3
Where to Go from Here 4
Part 1: Getting Started with Supplier Diversity 5
Chapter 1: Understanding the Growing Demand for Supplier Diversity 7
Breaking Down What Supplier Diversity Is and Isn’t 8
What it is 9
What it’s not 9
Investigating Whether Supplier Diversity Is Still Necessary 10
Looking at reasons supplier diversity is still necessary 12
Considering what supplier diversity needs to do to stay relevant 13
Examining External Drivers Redefining Supplier Diversity 14
Growth of minority entrepreneurship 15
Demographic shifts: The changing face of the majority 16
Social activism/economic inclusion 16
Accountability to secondary stakeholders 17
Recognizing Why Organizations Are Recommitting to Supplier Diversity 18
Complex business challenges/strategic advantage 18
Increased focus on collaboration in the supply chain 18
Compliance with the law 19
Accountability to primary stakeholders 19
Corporate social responsibility/stewardship 20
Chapter 2: Understanding the Foundation of Supplier Diversity 21
Looking at Where It All Began 22
Executive Order 10925 (1961): Established Committee on Equal Opportunity Employment 23
Executive Order 11246 (1965): Established Requirements for Non-discriminatory Practices 23
Executive Orders 11458 (1969) and 11625 (1971): Economic Entrepreneurial b Equality 23
Public Law 95-507 (1978) 24
Examining the Evolution of Supplier Diversity 25
Compliance with federal law (1969–1990) 27
The right thing to do (1990s–early 2000s) 27
Making the business case (2000s–present) 27
Pondering the Future of Supplier Diversity 28
Business and program globalization 28
Strategic advantage 29
Economic imperative 29
Chapter 3: Supplier Diversity Management: A New Way of Thinking 31
Defining Supplier Diversity Management 32
Perusing Supplier Diversity Management as a Process 33
Introducing the Supplier Diversity Management (SDM) Model 35
The internal process 37
The external process 37
The supplier development process 38
Getting Started with SDM 39
Phase 1: Internal efforts 40
Phase 2: External efforts 40
Phase 3: Supplier development 41
Chapter 4: Distinguishing between Supplier Diversity and DEI 43
Surveying the Programs’ Similar Names and Mission 44
Starting with diversity 44
Introducing inclusion 45
Expanding for equity 45
Diving into Their Different Audiences, Tactics, and Results 47
Customers/target audience 47
Tactics used 47
Measuring results 48
Becoming Collaborative Partners 50
Perusing the Pitfalls of Combining Supplier Diversity and DEI 50
Combining diversity efforts under one umbrella 51
The changing role of the Chief Diversity Officer 51
Changing the name of supplier diversity to “supplier diversity and inclusion” 52
Chapter 5: Digging into Supplier Diversity within the Organization 53
Understanding the Role of the Supplier Diversity Professional 54
Surveying How Supplier Diversity Fits into the Organization 55
With supply chain/procurement 56
With facilities/construction 57
With diversity and inclusion 58
With senior leadership 59
With community relations 59
With other departments and organizational initiatives 60
Getting Involved in the Procurement Process — From Beginning to End 60
Forecasting upcoming opportunities 60
Reviewing and ensuring bid documents/RFPs are inclusive 62
Participating on selection/evaluation committees 62
Establishing the vendor onboarding process 63
Informing and preparing prospective diverse vendors 63
Tracking performance and utilization 63
Sourcing and advocating for small and diverse businesses 63
Mediation and conflict resolution 64
Anticipating Potential Conflicts and Identifying Resolutions 64
Part 2: Developing Internal (Organizational) Supplier Diversity Efforts 69
Chapter 6: Gauging Your Organization’s Diversity Climate 71
Surveying Supplier Diversity and Organizational Change Management 72
Examining Your Organizational 4 P’s 74
Starting with your people 75
Reviewing your policy 75
Establishing your process 76
Identifying your procedures 78
Understanding the ‘Who-What-How’ of Your Organizational Spend 79
Who makes buying decisions? 79
What does your organization buy? 80
How does your organization buy what it needs? 80
Assessing Your Organization’s Vendor Relationship Management (VRM) 81
Vendor onboarding 82
Connecting vendors to internal stakeholders 83
Examining the vendor payment process 83
Understanding Strategic Sourcing as Part of Your Readiness Assessment 84
Determining the Right Leadership Structure for Your Efforts 86
Consultant 87
Direct hire 88
Employee add-on function 88
Chapter 7: Making the Case for Supplier Diversity 89
Aligning Supplier Diversity to Organizational Strategic Goals 90
Finding Value-Creating Opportunities 91
Communicating Value 92
Selling Your Supplier Diversity Story to Stakeholders 93
Chapter 8: Building Support for Supplier Diversity Programs 97
Seeing How Supplier Diversity Touches Many Stakeholders 97
Finding Allies throughout Departments in Your Organization 99
Diversity, equity, and inclusion (DEI) 100
Working with procurement 100
Apprising community relations of your strategy 102
Informing employees and ERGs 103
Looping in those responsible for sustainability initiatives 103
Developing an In-Reach Program 104
Training 104
Communication 105
Engagement through advisory councils/task forces 105
Aligning Programs to Collaborator Objectives: Solving WIIFT 106
Chapter 9: Identifying Common Barriers to Supplier Diversity 107
Identifying Common Organizational Barriers 108
Implicit biases 109
The status quo 110
Lift and shift mentality 110
Double duty/add-on function 111
Legacy data systems 111
Pinpointing Practitioner Barriers 112
Lack of clarity to carry out the mission 113
Inability to navigate the landscape 113
Unrealistic objectives for the organization or the community 114
Lack of the resources needed to successfully achieve objectives 114
No analytics/wrong metrics 115
Overcoming Barriers to Build a Successful Program 115
Chapter 10: Creating an Effective Supplier Diversity Plan 117
Starting Out with the Principles of Supplier Diversity Planning 118
Eyeing Your Vision Statement 119
Clarifying Your Mission 120
Locking in Your O.A.R. 121
Communicating your objectives 121
Defining your activities 122
Identifying your results (KPIs) 123
Putting the Plan Together 125
Part 3: Supplier Development and Supplier Diversity 129
Chapter 11: Creating an Environment that Puts Diverse Businesses First 131
Becoming the Champion for Diverse Businesses within Your Organization 132
Perusing supplier diversity’s key principles 132
Focusing on removing obstacles 133
Challenging the status quo 135
Fostering a Culture of Trust, Respect, and Transparency in Relationships 136
Building trust 138
Garnering respect 139
Cultivating transparency 140
Chapter 12: Building Capacity 143
Getting a Handle on Capacity Building 144
Covering Capacity Building Tasks 145
Evaluating the Capacity of Businesses within Your Organization 146
Getting started 147
Measuring success 148
Developing to Build Capacity 150
Part 4: Examining External (Community) Supplier Diversity Efforts 153
Chapter 13: Highlighting the Stages of Supplier Diversity Programs 155
Determining Your Program Stage and Dealing with Common Challenges 156
Startup stage 157
Growth stage 158
Mature stage 158
Identifying the Right Activities for Each Stage 159
Startup stage activities 160
Growth stage activities 161
Mature stage activities 163
Chapter 14: Cultivating Community Partners to Drive Supplier Diversity 165
Building Allies and Alliances through Collaborations and Partnerships 166
Using partnerships 166
Using collaborations 167
Reasons to consider partnerships or collaborations (or both) 167
Planning for Engagement 169
Finding the Right Community Partners: Local, State, Regional, and National 171
Local 172
State, regional, and national 172
Creating and Using Supplier Diversity Councils to Drive Efforts 173
Internal councils 173
External councils 173
Joint councils 173
Part 5: Using Technology and Compliance to Enhance Supplier Diversity 175
Chapter 15: Telling the World About Your Supplier Diversity Efforts 177
Understanding Why Communication Is Crucial in Supplier Diversity 178
Developing a Supplier Diversity Communication Plan 179
Establishing goals 180
Defining target audiences 181
Identifying key messages 182
Creating a tactical outreach plan 182
Chapter 16: Establishing Supplier Diversity Metrics, Benchmarks, and KPIs 185
Understanding the Importance of Metrics, Benchmarks, and KPIs 186
Establishing Metrics, Benchmarks, and KPIs 187
Metrics 187
Benchmarks 187
KPIs 188
Seeing How Software Can Help You Manage Your Program 189
Using Metrics to Tell Your Story 191
What’s your organization’s story? 191
What story are you telling? 193
Are your metrics getting in the way of the story? 195
Chapter 17: Understanding Tier 2/Subcontracting Spend 197
Tracing the History of Subcontracting 198
Stepping through the Levels: Tier 1, Tier 2, and Beyond 200
Tier 1 suppliers 200
Tier 2 suppliers 201
Tier 3 suppliers 201
Tier 4 suppliers and below 201
Managing Subcontractors and Tiered Procurement 203
Influencing Your Prime Vendors to Use Diverse Suppliers 204
Knowing the Importance of Tracking and Utilizing Tier 2 Data 205
Chapter 18: Getting a Grip on Goal Setting in Supplier Diversity 207
Aligning Supplier Diversity Goals with Procurement Strategies 207
Looking back at the purchasing department of yore 208
Working within the strategic sourcing model: It’s all about the bottom line 208
Helping diverse suppliers become more competitive: A win for everyone 210
Setting Goals with a Disparity Study 210
Setting Goals without a Disparity Study 212
Meeting Utilization Goals versus Adding Value 213
Chapter 19: Tracking, Measuring, and Reporting Metrics in Supplier Diversity: It’s All in the Numbers 215
Tracking Diverse Spend 216
Using certifications to identify diverse businesses 216
Identifying diverse spend based on accounts payable reporting 218
Measuring the Impact/Success of Supplier Diversity Efforts 219
Looking at economic impact 219
Knowing the importance of context in reporting total spend 220
Being Aware of Problems in Reporting 220
Garbage in, garbage out 221
Counting “self-certified” suppliers 221
Changes at the top that affect eligibility 221
Industry-specific reporting issues 222
Reporting What Matters: Creating an At-a-Glance Dashboard 223
Reporting to Senior Leaders and the Community 224
Keeping senior leaders informed 224
Presenting to the public and other supplier diversity professionals 225
Part 6: Building a Career in Supplier Diversity 227
Chapter 20: Becoming a Supplier Diversity Professional 229
Understanding Job Titles and Job Descriptions 230
Job titles 231
Job description 231
Looking at Department Structures and Job Functions 231
Department structures 232
Job functions 233
Supplier Diversity by Any Other Name: Examining Industry Terminology 235
Federal government 235
The public sector 235
Corporations 236
Landing a Job in Supplier Diversity 236
Already working in an organization 237
Applying for a new position 237
Transitioning into a new career 238
Chapter 21: Supplier Diversity Certifications and Continuing Education 239
Checking Out Certification Programs 239
Certified Professional in Supplier Diversity (CPSD) 240
Certified Supplier Diversity Professional (CSDP) 241
Compliance administrator certifications 242
Staying Current with Continuing Education 242
Alliance of Supplier Diversity Professionals 243
American Contract Compliance Association 243
Institute for Supply Management 243
National Minority Supplier Development Council 244
Supplier Diversity Training Institute 244
National Association of Educational Procurement Supplier Diversity Training Institute 244
Regional/industry specific programs 245
National conferences 245
Digging into Degrees, Diplomas, and Other Education Options 245
Undergraduate degrees 246
Graduate degrees 246
Online education 246
Part 7: The Part of Tens 249
Chapter 22: Nearly Ten Ways to Become an Effective Supplier Diversity Leader 251
Be the Champion within Your Organization 252
Be an Influencer 252
Be an Advocate 253
Be a Collaborator 253
Know How Your Organization Works 253
Know What to Ask For 254
Know the Needs of Your Business Community 254
Focus on Impact, Not Activities 254
Focus on Driving Results 255
Chapter 23: Ten (Plus One) Ways to Create a World-Class Supplier Diversity Program 257
Connect Program Deliverables to Organizational Goals 258
Develop Your 4 P’s to Be Small and Diverse Business-Centric 258
Focus on Connecting Businesses to Opportunities 259
Establish Your Place in Your Community’s Entrepreneurial Ecosystem 259
Become Self-Sustaining: From Limiting to Limitless 259
Invest in Analytics to Help Manage Your Program 260
Cultivate a Supplier Development Program Using M.O.D.E. 261
Don’t Be Afraid to Try New Programs 261
Put a Compliance Program in Place 262
Get Your Prime/Tier 1 Partners Involved 263
Get out from Behind That Desk 263
Chapter 24: Ten Myths about Supplier Diversity 265
Supplier Diversity Will Increase How Much We Pay for Things 265
Supplier Diversity Doesn’t Add Value Because It Doesn’t Generate Revenue 266
Supplier Diversity Is Just a Feel-Good Initiative 267
Supplier Diversity Is Too Confusing 267
Supplier Diversity Doesn’t Impact Our Bottom Line 268
Supplier Diversity and DEI Are Close Enough 268
Our Name Alone Will Deliver Program Results 269
Anybody Can Lead This Effort — Any Body 269
We’re Too Busy to Devote Energy to Supplier Diversity 270
Supplier Diversity Will Lower Our Standards 270
Index 271
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