Hackett Group research also shows virtually all diverse suppliers meet or exceed expectations
MIAMI & LONDON—Virtually all diversity suppliers meet or exceed expectations, and top corporate performers in supplier diversity experience no loss in efficiency, according to new research from The Hackett Group, Inc. In addition, those organizations see improved quality and often extract other benefits, including increased market share and access to new revenue opportunities.
To unlock the benefits of supplier diversity, The Hackett Group recommends companies consider expanding beyond traditional goals such as complying with regulations. Top performers in supplier diversity recognize the value of objectives such as the ability to gain access to new markets and improve supplier partnerships, the group said.
Companies should also look beyond basic measures such as the percentage of spend with diverse suppliers and calculate the true value of supplier diversity by using more sophisticated performance metrics such as satisfaction levels and other secondary metrics that are aligned to long- and short-term plans and objectives.
Companies with top-performing supplier diversity programs focus on several areas to make the most of their efforts, and go beyond the basics, the research found. These companies develop supplier partnerships, mentor local suppliers, collaborate with suppliers on product innovation, and share their experiences with other companies. They use supplier diversity as a reputation-builder to help increase market share and retain talent, and rely on social media to develop customer and brand awareness.
They also educate internal stakeholders on the value of supplier diversity, and interact with local communities of suppliers and consumers to better understand the market, establish relationships, and share supplier diversity goals.
“Supplier diversity is evolving from a check-the-box corporate social responsibility requirement to a strategic enabler providing access to new and innovative products and increased market share in new and developing communities,” said The Hackett Group research director Laura Gibbons. “Top-performing organizations are taking advantage of this opportunity, and applying the tenets of social diversity to new areas such as supplier partnering, reputation management and global expansion with exceptional results.”