06 Jun Supplier Diversity: What Does it Mean and How Does it Work in Canada?
What does supplier diversity mean? It’s one of those terms you often hear tossed around, but you may not have a true understanding of either the concept or the resulting impact.
Supplier diversity is, in its most simple terms, corporations accessing groups not customarily included in their supply chains. This primarily includes minority-, women-, LGBT- and Aboriginal-owned businesses that can access opportunities to supply to major corporations, including multinational as well as Fortune 500 companies to ensure that they are being inclusive in their supply chain practices in sourcing goods and services from suppliers of diverse backgrounds.
Canadian women-owned businesses make up less than five per cent of all domestic and international suppliers.
Supplier diversity involves implementing practices to identify, authenticate and match under-represented suppliers to procurement opportunities and then measuring the resulting effects.
Women’s Business Enterprises (WBE) Canada, reports 85 per cent of purchasing decisions involve women, yet Canadian women-owned businesses make up less than five per cent of all domestic and international suppliers to corporations and governments.
Diversity programs level the field so all potential suppliers can benefit from competing for corporate or government contracts.
In the U.S. and U.K., over 95 per cent of Fortune 500 companies offer supplier diversity programs, and in the U.S. over 80 per cent of multi-national corporations require supplier diversity efforts from their tier-one and tier-two suppliers. Programs in the U.S have been in place for over 20 years. However, work in this area in Canada has only been underway for less than a decade.
WBE Canada is one of two groups that offer a certification program in Canada for majority-owned, managed and controlled women’s businesses. The other is WEConnect International, a global network that connects women-owned businesses to qualified buyers around the world.
There are a couple of common misconceptions about diversity programs, including unfair advantage and that participation guarantees success. Let’s look at these:
The primary misconception is that supplier diversity programs create an unfair advantage for women or other underutilized minority groups. This is simply not true. The goal of these programs is to level the field so all potential suppliers can benefit from competing for corporate or government contracts.
Participation Guarantees Success
If only this were true. Participating in these programs does not guarantee success. Companies still have to prove their product in the marketplace. Having diversity programs in place simply means minority-owned businesses have an opportunity to participate in the tendering process.
Sales Beacon is passionate about empowering women and developing opportunities in rural communities across Canada.
If you are a Canadian woman and a business owner, you may want to consider becoming certified through WBE. One advantage of certification is access to companies which practice supplier diversity in their procurement processes. This includes corporate giants across multiple industries such as Bell, GM, IBM, Kellogg’s and TD. Other benefits include access to training, workshops and mentorship programs as well as networking opportunities.
In my next blog, I’ll look more closely at the certification process and break down some of the steps involved.
Sales Beacon is passionate about empowering women and developing opportunities in rural communities across Canada. Sales Beacon is proud to hold diversity certification with WBE Canada and WEConnect International and was recently chosen as second runner up in the video category at the WeConnect International Gala 2017.