Diversity equals opportunity in the global supply chain
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Diversity equals opportunity in the global supply chain
What was once a growing trend is now a full-blown opportunity for minority suppliers such as women, Aboriginal, disabled and visible minority entrepreneurs. Supplier diversity programs are initiatives designed to ensure that governments and large corporations do business with diverse suppliers by establishing a set percentage or dollar amount of their annual spend on certified minority-owned businesses.
Today, 97 percent of all Fortune 500 companies have supplier diversity programs. In 2009, Walmart spent $9.2 billion and AT&T committed $6.9 billion to diverse suppliers. They’re not alone. Governments and big business in Canada, the United States, the United Kingdom, China, India and South America have also recognized the value that diverse suppliers bring to the supply chain by establishing supplier diversity initiatives. These programs usually require tier-one suppliers to purchase from or subcontract to other diverse suppliers—setting in motion a chain of opportunities. In the U.S. alone, it’s a multi-billion dollar industry.
“Each company keeps a diversity scorecard to track what they spend on women and minority-owned products and services,” says Philadelphia-based Trade Commissioner Beth Pomper. “Some CEOs receive performance pay based on how successful their programs are. They’re not only passionate about it—supplier diversity is ultimately important to their bottom line.”
How to tap into supplier diversity opportunities
• Get certified as a majority-owned and controlled woman, Aboriginal or minority supplier.
• Participate in supplier diversity missions, procurement fairs and trade shows, such as the upcoming women’s mission to Las Vegas from June 20–23, 2011.
• Once certified, register your interest on the supplier diversity websites of the large corporations and governments you wish to do business with.
• Research your target organizations. Understand their needs and figure out how you can fill a gap or create a need.
• Take the time to network and build relationships with diversity procurement officers. Customize your pitch and demonstrate the value your product or service offers.
Accessing supplier diversity programs requires certification through WEConnect Canada or the Canadian Aboriginal and Minority Supplier Council. To become certified, a company must be at least 51 percent majority-owned and controlled by a woman, Aboriginal or minority entrepreneur. Although any firm can do business with multinationals and governments, certification is an absolute must if you want to access supplier diversity programs. After all, buyers are required to demonstrate diversity in the contracts they award to businesses through these initiatives.
“Certification has been golden for us,” says Marla Kott, co-owner of Vancouver’s Imprint Plus, a name badge manufacturer. “There is definitely a real desire to give women and diversity owned businesses a chance. They can’t promise they’ll buy from you because that would be ridiculous. You have to offer a quality product or service that provides them with exactly what they’re looking for.”
Since becoming certified and accessing supplier diversity programs, Kott’s business has grown rapidly in Canada, the U.S. and Europe. She now sells to 21 different industries, including such big names as Avis, Hyatt, Fairmont, Macy’s, MGM Casinos and UPS. “We had $8.5 million in sales in 2009 and $7.6 million in 2010, which we attribute to the economic downturn. Right now, we’re on track to doubling our numbers within three to five years thanks to supplier diversity,” says Kott. “I’m absolutely confident that our sales will eclipse what we’re doing right now.”
PEI’s Duinkerken Foods is also seeing success through supplier diversity. The gluten-free baking mix company caught the eye—and tastebuds—of Walmart buyers at a supplier diversity trade show in the U.S. last year.
“Once I became certified as a woman-owned enterprise, the doors really opened,” says owner Brenda vanDuinkerken. “It put us on Walmart’s radar and today, my products are on Walmart shelves across Canada, with plans for the U.S. next.”
To find out more about supplier diversity opportunities and how to tap into them, connect with the Canadian Trade Commissioner Service and Foreign Affairs and International Trade Canada’s Business Women in International Trade program.
