Supplier diversity and DEI programs are facing heightened scrutiny and resolve as political pressures cause businesses to rethink their diverse sourcing strategies.
Supply chain managers should think again before letting ongoing political shifts impact their company operations and procurement strategies. Successfully navigating this dynamic landscape is essential for businesses, affecting not only their social responsibility but also their supply chain resilience and competitiveness.
In the past decade or longer, there has been a significant increase in corporate and societal emphasis on diversity, equity and inclusion, driven in part by social movements and heightened awareness of racial and social justice issues. Procurement has often led the way.
How procurement has led the way in the past
The history of using HUB suppliers in procurement reflects a commitment to addressing historical disparities, promoting economic opportunities for underrepresented groups, and fostering a more inclusive and equitable business environment. Doing business with HUB suppliers is not only a socially responsible practice but also a strategic decision with multiple economic benefits. It stimulates job creation, promotes innovation, bolsters local economies, and contributes to overall economic stability and resilience.
Companies, both public and private, often have robust supplier diversity and DEI programs in place, with the aim of promoting fairness, representation and ethical and equitable business practices within their supply chains. The focus on supplier diversity expanded beyond racial and ethnic minorities to include women-owned, veteran-owned, LGBTQ+-owned, and disability-owned businesses, reflecting a broader commitment to diversity, equity and inclusion in procurement.
DEI in procurement is seen as an essential component of a company's broader commitment to social responsibility and ethical business practices. It continues to evolve as organizations recognize that promoting diversity and inclusion in their supply chains not only aligns with their values but also contributes to innovation, competitiveness and long-term sustainability.
For procurement professionals, this had been a long haul. The uphill battle to incorporate HUB and diverse suppliers into the active supply base has been tough, fighting through ingrained biases and pushback on adding new suppliers and perceived, but unrealized, risk. Advancements in technology, such as e-procurement platforms and data analytics, have enabled organizations to better track and measure their DEI efforts within procurement processes.
The intent of these programs is to promote fairness, representation and ethical practices within an organization's extended supply chain. However, in today’s politically charged climate, the dynamics of supplier diversity and DEI in procurement have become increasingly complex and significant.
Moving ahead with increased complexity
During this time of increased sensitivity and real-time social media impact, a company’s commitment to supplier diversity and DEI can be under constant public scrutiny.
Stakeholders, including customers, investors and advocacy groups, closely monitor an organization’s actions in these areas. Any misstep such as a perceived lack of commitment, or even overcommitment, can result in reputational damage, customer backlash and financial repercussions.
And this is not limited to companies primarily dealing with consumers. Industrial suppliers are also under the microscope in how they operate, including their labor practices, extended supply chain relationships, and shifting geopolitical alliances that seem to change by the hour.
Sure, there may be some buyers who willingly will hide behind this smokescreen to eliminate a sometimes-complicated corporate initiative, but forward-thinking procurement and supply chain professionals need to continue their momentum to build sourcing strategies that incorporate a full range of suppliers, including those that need some help in establishing their presence in mainstream supply chain.
It's just the right thing to do.
