Many companies refer to the words “diversity” and “inclusion,” mostly in reference to their corporate social responsibility (CSR) and diversity initiatives. But what does the word diversity really mean in this context?
Diversity is an expanding, growing, and ever-changing concept. Perhaps one approach we can take is to come up with some other words that can help us better understand what this word means in today’s business and sociological landscape.
Diversity in business can be expressed in terms of: race, gender, religion, background, political view, cultural experience and ideas. Typically, those terms relate to the individual employees that comprise a company. When it comes to diverse suppliers, a few other terms would surface and might include geographical location, innovation, creativity, community, certification, etc. The point being, diverse suppliers bring something new and valuable to your company.
Just as a savvy investor chooses to spread his/her financial savings across multiple types of investments, companies and industry segments, firms today are looking to bring increased diversity to their supplier base to add value, hedge against unpredictable market conditions, gain access to new markets, etc..
Some companies look at supplier diversity in terms of geographic location. They include suppliers from various (diverse) regions in an attempt to diversify and guard their supply chains from natural disasters, economic factors ~ sort of a contingency plan.
Other companies think about supplier diversity as a key marketing and customer generation tool. By reaching out to smaller, diverse companies larger companies are hoping to create goodwill in particular communities and indirectly create a new base of loyal customers. By injecting business at the community level, the company is not only getting a quality supplier, but a new customer base.
There are many more examples of how large corporations are thinking about diversity and inclusion. It is no longer an emerging concept, but a concrete issue that needs to be addressed in every large corporation’s business strategy. Supplier diversity in particular can open new doors for these corporations, becoming a gateway into new markets, new resources and a more diversified way of doing business.
Considering both the present and the future, how can companies utilize supplier diversity to better their position as well as conduct business in a socially responsible way? What is the future of supplier diversity?