Supplier Diversity For Dummies

Extend the principles of diversity and inclusion to your company's suppliers

Many people are familiar with the importance of ensuring and advancing inclusion, equity, and diversity amongst their employees and managers. But do your efforts include supplier diversity—an equally as important and essential part of any holistic diversity effort?

In Supplier Diversity For Dummies, nationally recognized small business strategist and economic inclusion and supplier diversity expert Kathey Porter delivers an empowering and informative guide to implementing this integral part of any robust inclusion initiative: supplier diversity. You'll understand the relevance of supplier diversity and why it's important to encourage equal opportunity for diverse suppliers and businesses owned and managed by underrepresented groups.

In this book, you'll also find:

• The answers to your most pressing questions about how to build a coherent and sustainable supplier diversity program
• Ways to contribute more fully to your company's diversity and inclusion functions
• Strategies to position supplier diversity as a central function in your organization

Perfect for company buyers, purchasing and procurement professionals, material management executives, strategic souring professionals and supplier diversity practitioners, Supplier Diversity For Dummies is a must-read resource for supply chain professionals, diversity and inclusion leaders and anyone looking to increase their proficiency in supplier diversity, improve supply chain inclusivity and increase their social impact.

Kathey Porter is an award-winning small business strategist and supplier diversity expert. She is the founder of Porter Brown Associates, a professional services consultancy that works with corporations and public entities on building supplier diversity programs. In 2020, Kathey launched the Supplier Diversity Training Institute.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 3

Where to Go from Here 4

Part 1: Getting Started with Supplier Diversity 5

Chapter 1: Understanding the Growing Demand for Supplier Diversity 7

Breaking Down What Supplier Diversity Is and Isn’t 8

What it is 9

What it’s not 9

Investigating Whether Supplier Diversity Is Still Necessary 10

Looking at reasons supplier diversity is still necessary 12

Considering what supplier diversity needs to do to stay relevant 13

Examining External Drivers Redefining Supplier Diversity 14

Growth of minority entrepreneurship 15

Demographic shifts: The changing face of the majority 16

Social activism/economic inclusion 16

Accountability to secondary stakeholders 17

Recognizing Why Organizations Are Recommitting to Supplier Diversity 18

Complex business challenges/strategic advantage 18

Increased focus on collaboration in the supply chain 18

Compliance with the law 19

Accountability to primary stakeholders 19

Corporate social responsibility/stewardship 20

Chapter 2: Understanding the Foundation of Supplier Diversity 21

Looking at Where It All Began 22

Executive Order 10925 (1961): Established Committee on Equal Opportunity Employment 23

Executive Order 11246 (1965): Established Requirements for Non-discriminatory Practices 23

Executive Orders 11458 (1969) and 11625 (1971): Economic Entrepreneurial b Equality 23

Public Law 95-507 (1978) 24

Examining the Evolution of Supplier Diversity 25

Compliance with federal law (1969–1990) 27

The right thing to do (1990s–early 2000s) 27

Making the business case (2000s–present) 27

Pondering the Future of Supplier Diversity 28

Business and program globalization 28

Strategic advantage 29

Economic imperative 29

Chapter 3: Supplier Diversity Management: A New Way of Thinking 31

Defining Supplier Diversity Management 32

Perusing Supplier Diversity Management as a Process 33

Introducing the Supplier Diversity Management (SDM) Model 35

The internal process 37

The external process 37

The supplier development process 38

Getting Started with SDM 39

Phase 1: Internal efforts 40

Phase 2: External efforts 40

Phase 3: Supplier development 41

Chapter 4: Distinguishing between Supplier Diversity and DEI 43

Surveying the Programs’ Similar Names and Mission 44

Starting with diversity 44

Introducing inclusion 45

Expanding for equity 45

Diving into Their Different Audiences, Tactics, and Results 47

Customers/target audience 47

Tactics used 47

Measuring results 48

Becoming Collaborative Partners 50

Perusing the Pitfalls of Combining Supplier Diversity and DEI 50

Combining diversity efforts under one umbrella 51

The changing role of the Chief Diversity Officer 51

Changing the name of supplier diversity to “supplier diversity and inclusion” 52

Chapter 5: Digging into Supplier Diversity within the Organization 53

Understanding the Role of the Supplier Diversity Professional 54

Surveying How Supplier Diversity Fits into the Organization 55

With supply chain/procurement 56

With facilities/construction 57

With diversity and inclusion 58

With senior leadership 59

With community relations 59

With other departments and organizational initiatives 60

Getting Involved in the Procurement Process — From Beginning to End 60

Forecasting upcoming opportunities 60

Reviewing and ensuring bid documents/RFPs are inclusive 62

Participating on selection/evaluation committees 62

Establishing the vendor onboarding process 63

Informing and preparing prospective diverse vendors 63

Tracking performance and utilization 63

Sourcing and advocating for small and diverse businesses 63

Mediation and conflict resolution 64

Anticipating Potential Conflicts and Identifying Resolutions 64

Part 2: Developing Internal (Organizational) Supplier Diversity Efforts 69

Chapter 6: Gauging Your Organization’s Diversity Climate 71

Surveying Supplier Diversity and Organizational Change Management 72

Examining Your Organizational 4 P’s 74

Starting with your people 75

Reviewing your policy 75

Establishing your process 76

Identifying your procedures 78

Understanding the ‘Who-What-How’ of Your  Organizational Spend 79

Who makes buying decisions? 79

What does your organization buy? 80

How does your organization buy what it needs? 80

Assessing Your Organization’s Vendor Relationship Management (VRM) 81

Vendor onboarding 82

Connecting vendors to internal stakeholders 83

Examining the vendor payment process 83

Understanding Strategic Sourcing as Part of Your Readiness Assessment 84

Determining the Right Leadership Structure for Your Efforts 86

Consultant 87

Direct hire 88

Employee add-on function 88

Chapter 7: Making the Case for Supplier Diversity 89

Aligning Supplier Diversity to Organizational Strategic Goals 90

Finding Value-Creating Opportunities 91

Communicating Value 92

Selling Your Supplier Diversity Story to Stakeholders 93

Chapter 8: Building Support for Supplier Diversity Programs 97

Seeing How Supplier Diversity Touches Many Stakeholders 97

Finding Allies throughout Departments in Your Organization 99

Diversity, equity, and inclusion (DEI) 100

Working with procurement 100

Apprising community relations of your strategy 102

Informing employees and ERGs 103

Looping in those responsible for sustainability initiatives 103

Developing an In-Reach Program 104

Training 104

Communication 105

Engagement through advisory councils/task forces 105

Aligning Programs to Collaborator Objectives: Solving WIIFT 106

Chapter 9: Identifying Common Barriers to Supplier Diversity 107

Identifying Common Organizational Barriers 108

Implicit biases 109

The status quo 110

Lift and shift mentality 110

Double duty/add-on function 111

Legacy data systems 111

Pinpointing Practitioner Barriers 112

Lack of clarity to carry out the mission 113

Inability to navigate the landscape 113

Unrealistic objectives for the organization or the community 114

Lack of the resources needed to successfully achieve objectives 114

No analytics/wrong metrics 115

Overcoming Barriers to Build a Successful Program 115

Chapter 10: Creating an Effective Supplier Diversity Plan 117

Starting Out with the Principles of Supplier Diversity Planning 118

Eyeing Your Vision Statement 119

Clarifying Your Mission 120

Locking in Your O.A.R. 121

Communicating your objectives 121

Defining your activities 122

Identifying your results (KPIs) 123

Putting the Plan Together 125

Part 3: Supplier Development and Supplier Diversity 129

Chapter 11: Creating an Environment that Puts Diverse Businesses First 131

Becoming the Champion for Diverse Businesses within Your Organization 132

Perusing supplier diversity’s key principles 132

Focusing on removing obstacles 133

Challenging the status quo 135

Fostering a Culture of Trust, Respect, and Transparency in Relationships 136

Building trust 138

Garnering respect 139

Cultivating transparency 140

Chapter 12: Building Capacity 143

Getting a Handle on Capacity Building 144

Covering Capacity Building Tasks 145

Evaluating the Capacity of Businesses within Your Organization 146

Getting started 147

Measuring success 148

Developing to Build Capacity 150

Part 4: Examining External (Community) Supplier Diversity Efforts 153

Chapter 13: Highlighting the Stages of Supplier Diversity Programs 155

Determining Your Program Stage and Dealing with Common Challenges 156

Startup stage 157

Growth stage 158

Mature stage 158

Identifying the Right Activities for Each Stage 159

Startup stage activities 160

Growth stage activities 161

Mature stage activities 163

Chapter 14: Cultivating Community Partners to Drive Supplier Diversity 165

Building Allies and Alliances through Collaborations and Partnerships 166

Using partnerships 166

Using collaborations 167

Reasons to consider partnerships or collaborations (or both) 167

Planning for Engagement 169

Finding the Right Community Partners: Local, State, Regional, and National 171

Local 172

State, regional, and national 172

Creating and Using Supplier Diversity Councils to Drive Efforts 173

Internal councils 173

External councils 173

Joint councils 173

Part 5: Using Technology and Compliance to Enhance Supplier Diversity 175

Chapter 15: Telling the World About Your Supplier Diversity Efforts 177

Understanding Why Communication Is Crucial in Supplier Diversity 178

Developing a Supplier Diversity Communication Plan 179

Establishing goals 180

Defining target audiences 181

Identifying key messages 182

Creating a tactical outreach plan 182

Chapter 16: Establishing Supplier Diversity Metrics, Benchmarks, and KPIs 185

Understanding the Importance of Metrics, Benchmarks, and KPIs 186

Establishing Metrics, Benchmarks, and KPIs 187

Metrics 187

Benchmarks 187

KPIs 188

Seeing How Software Can Help You Manage Your Program 189

Using Metrics to Tell Your Story 191

What’s your organization’s story? 191

What story are you telling? 193

Are your metrics getting in the way of the story? 195

Chapter 17: Understanding Tier 2/Subcontracting Spend 197

Tracing the History of Subcontracting 198

Stepping through the Levels: Tier 1, Tier 2, and Beyond 200

Tier 1 suppliers 200

Tier 2 suppliers 201

Tier 3 suppliers 201

Tier 4 suppliers and below 201

Managing Subcontractors and Tiered Procurement 203

Influencing Your Prime Vendors to Use Diverse Suppliers 204

Knowing the Importance of Tracking and Utilizing Tier 2 Data 205

Chapter 18: Getting a Grip on Goal Setting in Supplier Diversity 207

Aligning Supplier Diversity Goals with Procurement Strategies 207

Looking back at the purchasing department of yore 208

Working within the strategic sourcing model: It’s all about the bottom line 208

Helping diverse suppliers become more competitive: A win for everyone 210

Setting Goals with a Disparity Study 210

Setting Goals without a Disparity Study 212

Meeting Utilization Goals versus Adding Value 213

Chapter 19: Tracking, Measuring, and Reporting Metrics in Supplier Diversity: It’s All in the Numbers 215

Tracking Diverse Spend 216

Using certifications to identify diverse businesses 216

Identifying diverse spend based on accounts payable reporting 218

Measuring the Impact/Success of Supplier Diversity Efforts 219

Looking at economic impact 219

Knowing the importance of context in reporting total spend 220

Being Aware of Problems in Reporting 220

Garbage in, garbage out 221

Counting “self-certified” suppliers 221

Changes at the top that affect eligibility 221

Industry-specific reporting issues 222

Reporting What Matters: Creating an At-a-Glance Dashboard 223

Reporting to Senior Leaders and the Community 224

Keeping senior leaders informed 224

Presenting to the public and other supplier diversity professionals 225

Part 6: Building a Career in Supplier Diversity 227

Chapter 20: Becoming a Supplier Diversity Professional 229

Understanding Job Titles and Job Descriptions 230

Job titles 231

Job description 231

Looking at Department Structures and Job Functions 231

Department structures 232

Job functions 233

Supplier Diversity by Any Other Name: Examining Industry Terminology 235

Federal government 235

The public sector 235

Corporations 236

Landing a Job in Supplier Diversity 236

Already working in an organization 237

Applying for a new position 237

Transitioning into a new career 238

Chapter 21: Supplier Diversity Certifications and Continuing Education 239

Checking Out Certification Programs 239

Certified Professional in Supplier Diversity (CPSD) 240

Certified Supplier Diversity Professional (CSDP) 241

Compliance administrator certifications 242

Staying Current with Continuing Education 242

Alliance of Supplier Diversity Professionals 243

American Contract Compliance Association 243

Institute for Supply Management 243

National Minority Supplier Development Council 244

Supplier Diversity Training Institute 244

National Association of Educational Procurement Supplier Diversity Training Institute 244

Regional/industry specific programs 245

National conferences 245

Digging into Degrees, Diplomas, and Other Education Options 245

Undergraduate degrees 246

Graduate degrees 246

Online education 246

Part 7: The Part of Tens 249

Chapter 22: Nearly Ten Ways to Become an Effective Supplier Diversity Leader 251

Be the Champion within Your Organization 252

Be an Influencer 252

Be an Advocate 253

Be a Collaborator 253

Know How Your Organization Works 253

Know What to Ask For 254

Know the Needs of Your Business Community 254

Focus on Impact, Not Activities 254

Focus on Driving Results 255

Chapter 23: Ten (Plus One) Ways to Create a World-Class Supplier Diversity Program 257

Connect Program Deliverables to Organizational Goals 258

Develop Your 4 P’s to Be Small and Diverse Business-Centric 258

Focus on Connecting Businesses to Opportunities 259

Establish Your Place in Your Community’s Entrepreneurial Ecosystem 259

Become Self-Sustaining: From Limiting to Limitless 259

Invest in Analytics to Help Manage Your Program 260

Cultivate a Supplier Development Program Using M.O.D.E. 261

Don’t Be Afraid to Try New Programs 261

Put a Compliance Program in Place 262

Get Your Prime/Tier 1 Partners Involved 263

Get out from Behind That Desk 263

Chapter 24: Ten Myths about Supplier Diversity 265

Supplier Diversity Will Increase How Much We Pay for Things 265

Supplier Diversity Doesn’t Add Value Because It Doesn’t Generate Revenue 266

Supplier Diversity Is Just a Feel-Good Initiative 267

Supplier Diversity Is Too Confusing 267

Supplier Diversity Doesn’t Impact Our Bottom Line 268

Supplier Diversity and DEI Are Close Enough 268

Our Name Alone Will Deliver Program Results 269

Anybody Can Lead This Effort — Any Body 269

We’re Too Busy to Devote Energy to Supplier Diversity 270

Supplier Diversity Will Lower Our Standards 270

Index 271

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