The Basics of Supplier Diversity

Lately every time I open up my email I am flooded with mail regarding Supplier Diversity sign up applications.  Almost every business magazine has an ad page from a large corporation claiming they have instituted Supplier Diversity Programs.  I have contacted dozens of these Supplier Diversity companies about working with our 8a-certified security company and have yet to receive any business.   Or, for that matter, even a call.  So what is ""Supplier Diversity"" and what does it really mean for your business?

What Is It?
Supplier Diversity is the latest buzzword for a fairly vague, but growing trend in the private sector.  It describes the fairly recent decision by many large corporations to target women-owned and minority-owned vendors as preferred suppliers.  In fact, many of the large companies are spending their advertising dollars on ad and direct mail campaigns in an attempt to attract ""qualified"" women-owned and minority-owned vendors and suppliers to register with their companies.

What Caused It?
As large companies became more aware that their customer base was so diverse, they became more proactive in instituting supplier diversity practices.  Because there are no direct Federal programs designed to incentivize, no tax credits for compliance, Supplier Diversity is not a legislated, economic-based phenomenon.  It has its roots in the understanding that customer bases are often made up of people who own or work for potential suppliers from the same ethnic or gender pool.  In other words, it is simply ""good business"" for larger companies to work with smaller companies who are owned by people who happen to be their customers.

What Does This Mean For Your Small Business?
In the overview, corporations may be looking to increase their supplier diversity portfolio to include more minorities and women.  How much interest or resource they really apply to the practice varies widely.  Many companies are using the concept in their advertising campaigns and not actively pursuing Supplier Diversity as a priority practice.  Others do.  Without some central information exchange or government program, it is very difficult to pinpoint the companies who are serious from those who are using the phrase to sell more products.