Supplier diversity programs are solutions that encourage the use of suppliers from diverse backgrounds. The idea behind this business philosophy is to encourage the use of suppliers from marginalized backgrounds. The marginalization can be the result of ethnic, religious, gender, sexual orientation, age, or such other factors. This field of business intends to achieve two goals through the use of these programs. The first goal is to increase the inclusivity of the business environment on a national level. The second goal is to provide tools to empower those people economically that have been previously marginalized. There are certain salient aspects that must be covered in any program that is used to achieve diversity in supply networks.
Use of a diversity database
A diversity database is a database of suppliers who come from marginalized groups. These groups can be women, youth, or races that have been marginalized. The database acts as a centralized location of all of the information that pertains to particular sections of the supply network. The database needs to be quite comprehensive and must be kept updated. The information that is contained in this database is what companies will use to increase the diversity of their supply chains.
Pre-qualification
For a supplier diversity program to be efficient and successful at its intended use, it must have useful information on the suppliers contained. This means that the suppliers need to be prequalified. Pre-qualification means that these suppliers have been vetted on their ability to meet the needs of their clients. If the suppliers are not vetted, there is the possibility of poor suppliers getting into the information matrix. This will reduce the effectiveness of the supply chain and will reduce the trust that companies using the database place in it. Pre-qualification builds faith and trust in the database and will, therefore, increase the usage of the database.
Geo-location based information
An effective supplier diversity program is one that is region based. This is because the location of the supplier is an important factor that every business will take into account. This means that when cataloguing suppliers from marginalized groups the information must be sorted into regions. This way the companies using the database are able to determine the effectiveness of the suppliers that they choose to work with. Diversity in supply chains is not just about community social responsibility through affirmative action. It is a tool that enables a company to increase their positive impact on economic empowerment.
