Why Organizations Should Care About Supplier Diversity

Supplier diversity is a management practice that ensures a diverse supplier base for goods and services for an organization. When implemented as a best practice, supplier diversity emphasizes the development of a diverse supply chain encouraging the sourcing of supplies and services from minority-owned, women-owned, veteran-owned, LGBT-owned, service disabled veteran-owned, historically underutilized businesses, and SBA-defined small business vendors.

Not only does supplier diversity benefit the community, the economy and the supplier, supplier-diversitybut statistics show that companies who embrace diversity are more profitable than companies who do not.

According to research from Atlanta business consultant Hackett Group, companies that ‘focus heavily on supplier diversity’ generate a 133 percent greater ROI than those firms that look no further than their traditional suppliers. The companies surveyed also reported that supplier diversity programs drive an additional $3.6 million to an organization’s bottom line for every $1 million spent in procurement operating costs.

Benefits of Having a Diverse Supplier Base

  • Promote innovation through the introduction of new products, services and solutions
  • Open up multiple channels from which to procure goods and services
  • Increase competition (on both price and service) from both existing and potential vendors
  • Access a new, growing customer base
  • Attract top-tier partners and talent
  • Give a company the opportunity to leverage new paths to growth
  • Demonstrate your organization’s commitment to doing business with diverse markets
  • Showcase your company’s interest in the economic growth of all communities

MBEs are part of the nation’s growth equation. NMSDC (National Minority Supplier Development Council) prepared a study in 2014 that illustrated the economic impact of certified MBEs. The study found that MBEs in the U.S. generate more than $1 billion in economic output every day – equating to nearly $401 billion annually.

Not only have many progressive and international corporations recognized the value of supplier diversity, the U.S. government has as well. In 2011, President Obama signed the Government-Wide Diversity and Inclusion Strategic Plan, an executive order directing all executive departments and agencies to create and implement a more comprehensive and strategic focus on diversity and inclusion in the federal workforce. The order also requires that any firm wishing to do business with the federal government must have a supplier diversity program in place.

Ready to diversify your supply chain? These are organization’s that list MBEs and/or WBEs:

At CREDO, diversity and inclusion is part of our culture. We are proud to be a certified Minority Business Enterprise (MBE). To learn more, read our Commitment to Diversity.

Missy Flexman





Missy Flexman Senior Account Manager, IT Staffing Division

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