Building a Supplier Diversity Program

By Dennis M. Baker President and Chief Executive Officer, Avendra, LLC | November 02, 2008

Companies look to utilize diverse-owned suppliers for a variety of reasons ranging from regulatory requirements to constituency expectations to deep-seeded corporate philosophies.

As a provider of supply chain management services to the hospitality industry, Avendra has developed an approach to building relationships between customers and diverse-owned businesses that seems to work for all parties. In order to set up, maintain and monitor a successful supplier diversity program, we believe there are three vital steps:

  1. Identify success metrics - Clearly outline the business benefits and quantify the ultimate goals,
  2. Outreach & qualification - Set up an outreach system that both identifies and qualifies appropriate diversity suppliers for the given business goals,
  3. Measure & enhance - Keep track of the successes and the challenges, and look to constantly evolve your program to meet your unique goals.

Identifying Success

Start by really thinking about what your organization is looking to get out of a diverse supplier program. Many companies start with the foundational belief that using minority suppliers is good for business, then move to a more tactical view of how to make that vision a reality. What specific targets and metrics will allow you to meet your business objectives? What are the interim steps and milestones that are critical to helping you meet those goals? Keep those target metrics and milestones at the forefront of everything you do, and "check in" against them on a periodic basis.

A good example of an organization that has built a successful diversity program is Marriott International. Marriott has long recognized the importance of diversity in their supplier community. Marriott set a goal to spend 15 percent with diverse suppliers by 2009. By focusing on this goal they have been able to made headway in meeting their diversity objectives. According to Mike Tobolski, Senior Director, Supplier Relations, Marriott International, ""We are definitely on track with our diversity goals. Last year, we spent 13.6 percent or $478 million with diverse-owned suppliers."

Outreach & Qualification

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