When choosing a supplier, businesses today have to take a lot of different factors into account. Will this supplier be there when needed?
What issues does this vendor face in today’s world of constantly changing supply chain issues? Does this supplier match my values as well as those of my company and clientele? Does this supplier fit our supplier diversity requirements?
All of these questions are important, but the benefits of working with a certified diverse supplier go beyond the requirements. There is a definite business case to be made for seeking out diverse suppliers as part of a solid, successful supply chain.
The “technical” definition of a diverse company is one for which 51% of the company is owned by a person or persons with diverse backgrounds. A company with diverse ownership can seek to have that status certified. This happens through a third-party certification program or in some cases you can self-certify.
Where does the business case start? Right at the heart of the supply chain, and that area where businesses continue to have issues–supply chain stability. Leveraging a supplier diversity network creates an equitable and inclusive supply chain and broadens the pools of suppliers to choose from. Like all businesses, companies with supplier diversity certification have multiple channels on which to rely for goods and services critical to their business and very often they are working with other supplier diversity businesses.
While providing increased supply chain stability, supplier diversity can also lead to greater market share and improved profitability. Supporting and working with supplier diverse businesses can translate into a larger market, as well as a greater share of existing customers.
While the business reasons for using certified diverse suppliers are numerous, let’s finish with the two most readily accepted in the business world. First, consumers are becoming even more socially conscious. A recent consumer study suggested nearly 60% of American consumers consider themselves socially conscious. Claiming a certified diversified supplier can attract those socially conscious consumers.
Finally, the nation’s largest buyer of goods and services is the U.S. government. The government requires, as part of its procurement process, a percentage of those goods and services be provided by a certified diverse supplier. Diverse suppliers fall into different diversification categories such as small businesses, businesses owned by women, minority-owned businesses and veteran-owned businesses to name a few categories.
How important is using a supplier that has a diversity certification?
The importance of utilizing a certified diversified supplier is sometimes subjective, but not always. For those purchasing for government entities, a diversity supplier certification can be mandatory if there is a specific set-aside in the solicitation, or at least preferred. That’s at any level of government, from a municipality to the federal government. But for private companies, that decision is made based on their level of Corporate Social Responsibility (CSR) and what they feel the expectation of their customers is regarding this type of social responsibility. For example, Coca-Cola set a goal of $1 billion spent each year with diverse suppliers.
For companies seeking a supplier as part of their manufacturing process, having a vendor partner that is a certified diverse supplier is becoming increasingly important. It is not only a way to meet a company’s material needs, but also contributes to the growing desire among companies to be demonstrably socially conscious.
Mayer Alloys is certified as a WBE (Women Business Enterprise) by the Women’s Business Enterprise National Council (WBENC), the nation’s largest third-party certifier of businesses owned and operated by women and a Certified WOSB (Women-Owned Small Business for federal contracting) through the Small Business Administration. Mayer Alloys is also a member of the Great Lakes Women’s Business Council, an organization committed to empowering women through access to capital assistance programs, business development training, vendor certification, and B2B networking.
Let us know how we can help you meet your supplier diversity requirements.