Supplier Diversity

Supplier Diversity

Supplier Diversity is a proactive business program which encourages the use of minority-owned, women owned, veteran owned, LGBT-owned, service disabled veteran owned, historically underutilized business, and SBA-defined small business vendors as suppliers. In past years,  "social responsibility" were the operative words used by corporations to justify establishing supplier diversity programs.  Today,  however,  medium and Fortune 500 companies implement them to realize concrete business objectives that benefit both the corporations and their minority suppliers.

Given the rising strategic importance of supplier diversity due largely to demographic restructuring in industrialized countries,  there is an ongoing need to understand best practices that are likely to facilitate the integration of ethnically and racially heretogeneous suppliers into a company's supply chain.

Moreover,  with the recent realization that the United States needs to become again a nation of global exporters in order to preserve its world-class economic leadership, as well as the rapidly accelerating and increasingly more pervasive shift of the past 35 years towards diversity and inclusiveness in American society,  it has become an economic imperative for American corporations and other international companies operating on American soil to embrace supplier diversity programs in order to remain competitive both domestically and internationally. 

For the past few years,  the Chamber has embarked with mixed results on developing relationships with many supplier diversity programs as well as in educating its members about this growing business opportunity. Briefly,  what we have learned from the interaction with both corporate and member companies is that the success of supplier diversity programs is a three-legged stool.  Corporations need to identify and select minority suppliers carefully while at the same time sponsoring a credible mentoring program and developing a pipeline of diverse suppliers.

On the other hand,  prospective minority suppliers need to recognize and understand the paradigm shift from supply chain as a social responsibility to a what-you-can-do-for-us, bottom-line, new order of business for large corporations.  It is no longer enough to just provide goods and services but also for minority vendors to understand the customer's overall production and where their companies fit within the corporation's overall supply chain.

By the very challenges entailed in bringing economically disadvantaged businesses into the private and government marketplaces, supplier diversity programs have been a learning and somewhat costly process for all stakeholders that have ultimately resulted in variable but, of late, mostly largely successful programs.

The Chamber recognizes the challenges and opportunities inherent to the establishment of supplier diversity programs and,  therefore,  has adopted a proactive approach in engaging both its members and the corporations that may need their products and services.

Building a Diverse Supplier Pipeline.

Within and outside its membership and in partnership with member corporations,  the Chamber is recruiting, qualifying and integrating member companies into a centralized supplier database.  In general, potential minority suppliers tend to be younger and own smaller companies than the average business and are not generally found in national supplier databases.  For corporations,  identifying and locating minority suppliers and performing proper due diligence can be challenging.  The Chamber's unique supplier search strategy will provide over time a qualified pool of vendors thus,  reducing a corporation's time and energy invested in creating their own supplier pipeline.

Strengthening Minority Suppliers' Financial and Performance History.

Through partnership with banks,  minority certification companies,  local and state purchasing agencies and large government contractors we are slowly but surely building a pipeline of more competitive minority suppliers.  Areas such as access to capital and performance bonds remain a challenge to minority suppliers.

Establishing a Partnership with Corporate Supplier Diversity Programs.

One of the Chamber's top priorities is to identify corporations and government agencies throughout the Mid-Atlantic region that are interested in establishing a proactive relationship with our members.  We structure and mediate the relationship along a continuum that initially consists of general outreach efforts to create a pull effect that attracts diverse suppliers for current or future needs and evolves eventually to high engagement activities such as one-on-one supplier interviews and participation in matchmaking events,  e.g.,  our annual Greater Washington Procurement Fair.  We believe this progressive interaction allows diverse suppliers to understand more fully an organization's requirements as well as gain a greater insight regarding how best to differentiate themselves vis-a-vis the competions.

Fostering and Enabling Supplier's Desire to Grow.

Small minority businesses often lack sufficient personnel or skills at the executive level to successfully manage and sustain growth.  Because of this limitations,  the Chamber established a Small Business Development Training Center (SBDTC) and is in the process of developing a Procurement Opportunities and Training Center (POTC).  For the past five years,  the SBDTC has conducted a variety of business seminars and workshops to enable members to become more competitive and understand better the management of their own companies.

Encouraging Mentoring of Minority Suppliers.

Successful Supplier Diversity Programs recognize the importance of mentoring their suppliers because it strengthens the capabilities of their suppliers while increasing the pool of successful minority vendors for corporations.

Providing Operational Management Training.

Minority suppliers generally lack the scale or expertise to establish or sustain continuous improvement programs. Companies that integrate their suppliers into their internal quality programs can improve their vendors' productivity and operational quality while lowering their supplier diversity programs' costs.

Improving Vendor's Capacity Building.

Access to capital is one of the greatest obstacles that minority suppliers face.  We help strengthen a vendor's capacity to access capital by encouraging potential strategies for financing and fostering a closer relationships with banks.  Major deficiencies among minority business are the lack of adequate financial documents,  up-to-date business plans,  and management savviness to determine the right time to scale up their businesses.  In that vein,  the MAHCC sponsors a Small Business Training Institute that offers business course on how to talk to bankers so they listen,  how to prepare a business plan step by step,  how to become 8a-certified or how to market products and services.  Soon, we will offer interactive, online courses.  Finally,  corporations can play a major role in alerting their most successful vendors about upcoming procurement opportunities and advising them on growth requirements and strategies.

If you are a veteran,  women or minority-owned business interested in joining the Chamber in order to take advantage of the Chamber's Supplier Diversity Program or if you are a large corporation or government agency interested in participating in our program,  please call 301-404-1946 for further information.

Read 7913 times Last modified on Friday, 19 February 2016 17:39

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