Top 5 Supplier Diversity Program Challenges and Opportunities

January 11, 2019

By Daryle Johnson, Manager of Strategic Business Development and Data Management and Visualization

Supplier diversity program management is an especially unique and challenging role. It requires flexibility and a combination of very broad and very specific knowledge about your own business and that of your suppliers.

Typical duties of a supplier diversity manager include building relationships with internal buyers and suppliers, spotting opportunities to add more diverse suppliers to the supply chain, advocating for and developing suppliers, and communicating the benefits of all these efforts.

This doesn’t leave a lot of time left for exploring and analyzing supplier data to discover new opportunities. In fact, you probably spend so much time manually compiling your data into basic reports that you have no time left for more advanced insights. If you had the right processes and systems in place, your data could tell you all kinds of interesting, helpful things you never knew to look for.

To show you what we mean, we’ve created a list of top five supplier diversity program manager challenges. Along the way, you'll discover the capabilities that better data management and systems enable.

Challenge #1: Understanding of every part of your organization.
Understanding every part of your business allows you to spot new opportunities to include diverse suppliers. For example, you want to be the first to know when a current supplier can’t meet demand. Perhaps that supplier could be replaced by one of your diverse suppliers–maybe even at a lower cost or higher quality. Building relationships with internal buyers and thoroughly understanding their needs is the way to quickly identify opportunities.

Another key enabler to understanding your organization well enough to spot diverse supplier opportunities is an intelligent data strategy with the right technology in place to support it. The ability to pull data about your organization and your supply chain quickly—and we’re talking hours or days here, not weeks—makes a huge difference in your ability to spot trends and opportunities. You want to be able to quickly pull data from multiple systems, separate and combine it as needed, and create effective visualizations. That way you can spend more time exploring and understanding that data, making connections and figuring out how to use your program to improve the business in ways that resonate strongly with leadership and can be measured quantifiably—like cost savings and quality improvement.

Challenge #2: Understanding your suppliers and their businesses.
When you understand the ins and outs of your suppliers’ businesses, you can match them up more effectively with the right opportunities within your organization. You’re also equipped to recognize ways that you can promote a better working relationship. For example, a change in ownership may signal potential risks as well as opportunities. The sooner you’re aware of big—and small—changes in their organization, the sooner you can mitigate effects to your own business and take advantage of the opportunities that arise. Similarly, cash flow issues aren’t uncommon for small businesses. You may benefit from smoother working relationships and greater availability of suppliers if your business is willing to identify the issue ahead of time and extend credit to the supplier to enable a partnership.

With a standard data governance process and appropriate systems in place, you can automate supplier data collection, freeing you up to spend more time on nurturing supplier relationships and planning for the future. You may, for example, set up a vendor database portal that allows suppliers to easily log company information electronically. With a dedicated and well managed database, you’ll have quick access to reliable and updated supplier information.

Challenge #3: Effectively advocate for diverse suppliers.
The ability to advocate for your suppliers requires sincere dedication to brokering relationships and bridging the gap between your business and potential suppliers. Performing this function effectively is highly dependent on mastering the above two challenges—you must understand both sides of the equation to create a situation that adds up to benefits for both. You can try to tackle the above challenges without proper data governance and management, and you may even see a small bit of success, but there’s absolutely no way to surmount this third challenge without reliable, trustworthy and current data. It’s the only way to make connections between what the business needs and what your suppliers offer.

Challenge #4: Communicate meaningful program results to the business.
Building your team’s reputation within the business is just as important as all the other work you do. Just like everyone else, your work matters, and proving it is key to getting more investment and interest in your program goals. More investment in your program results in more positive impact to the business, which results in more investment in your program, leading to more positive impact, etc. This is the program cycle you want to create.

Most programs begin with business leaders primarily concerned with increasing their supplier diversity spend as a means of keeping competition fair and maintaining the reputation of the business. Many programs start out with reporting on only their ‘Tier 1’ direct suppliers, and sometimes even only the businesses within Tier 1 that fall into their top five in terms of spend. That’s fine for a start, but the ultimate goal has to be to look beyond the top five and to get insight into ‘Tier 2’ suppliers—diverse businesses supplying goods or services to your supplier. Going deeper than Tier 1 and top five measurements requires proper processes and technologies in place for collecting, maintaining, and accessing data.

Challenge #5: Build meaningful relationships and develop suppliers.
Supplier development involves partnering with suppliers to offer mentoring and resources to ensure mutual success. Getting involved with certifying organizations and participating in events within your suppliers’ communities are great ways to strengthen relationships. Making mentors available can go a long way in setting both businesses up for success. As you know, proper processes and technology are critical enablers to success in this area. If you spend most of your time sifting through spreadsheets, creating manual reports, and handling supplier communications one by one, you won’t have time to develop a strong strategy for relationship building and the development of your suppliers. That’s when you know it’s time to consult the experts.

Better data is the answer.
As with most things in business these days, data holds the key to reaching your goals, expanding your program, and positioning your company as a diversity leader. But every organization’s data needs and technologies are different. The last thing you need is a standard one-size-fits-all template that’s so difficult to customize for your business that you might be better off doing nothing at all.

That’s the number one reason Onebridge spends time embedding our team within our customers’ teams and understanding their unique challenges. We create a customized plan designed to solve specific pain points in your program or simply take it to the next level of maturity. As an MBE-certified and woman-owned business, data analytics services for supplier diversity programs is an intuitive part of our DNA because we understand both perspectives in a way that sets us apart. Chat with us about our supplier diversity experience now to find out more.

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