How to open up dialogue with stakeholders around supplier diversity?

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The question is: How can you open up a dialogue with stakeholders around supplier diversity?

The greek work ”dialogos” originally means conversation. A dialogue requires a certain amount of participation and mutual influencing from all parties.

It should incorporate the different opinions, arguments and preferences in the end result.

The same applies to the dialogue you should have with your stakeholders around supplier diversity.

The first question you should ask yourself is: who are the stakeholders?

In the following I have mentioned some of the most typical stakeholders and how you can open up the dialogue with them.

First I would just like to briefly touch the “which type of diverse suppliers” question. Which type of “diverse” suppliers you should focus on depends very much on the nature of your business and what makes most sense.

I recommend you to develop a business case to make a proper evaluation. The business case could be qualified by organisations speaking on behalf of the group of diverse suppliers.

Please note, that there is a shift in focus when it comes to supplier diversity. A shift from working with all types of supplier diversity “groups”, to focusing on small businesses only (SME’s). The reason being, that new business opportunities, created by large corporations, somehow still cycles back and remain in the hands of majority owned companies.

Their arguments to why it is so, is quite logical. Whenever diverse businesses have to hire they usually require high technical skills, college degrees and subject matter expertise. These are not skills found amongst the unemployed, underemployed and under educated populations in our economically depressed communities. So there simply is no job creation and wealth building, only goes to business owners.

One of the challenges, when it comes to suppliers is to control the number of small suppliers approaching you and controlling which ones can qualify to your definition of being a diverse supplier.

Here are some tips to activities you can initiate in order to find the “right ones” and to help you maintain a “stakeholder dialogue”.

  • Create a supplier portal. Here you can ask questions and pre-approve the suppliers
  • Advertise in publications that appeal to diverse supplier groups
  • Participate in networking with diverse supplier groups and belong to their organizations.
  • Support suppliers in building consortiums
  • Arrange events where you share your expertise with your suppliers and encourage them to participate in tenders

When it comes to maintaining and developing a dialogue with the management team and the procurement professionals I think it is essential to ensure that the supplier diversity approach benefits the company bottom line. Also the approach should be well planned. That is the key to an effective stakeholder dialogue.

Obtain the strategic overview
Before you plunge into the actual “doing” of supplier diversity, it is well worth spending some time thinking about your organisations vision for supplier diversity. What would you like to achieve?

Make sure that your strategic approach to supplier diversity links with your company´s mission, objectives and business strategy. Engage with the senior management team (top down) and other stakeholders and ensure you get buy-in.

Setting up a supplier diversity approach calls for commitment of both time and resources. You can also seek advice and inspiration in forums discussing supplier diversity or with organisations, which help organise diverse suppliers. See if you can get a dedicated person to deal specifically with supplier diversity.

It is also a good idea to carry out a market survey of the suppliers available. The survey you should carry out should identify (for the suppliers you use today):

  • The size of the business and the (diverse) type of supplier
  • Their percentage share of the organisations total spend
  • The size of the (potential) business and their capabilities
  • Their potential procurement opportunities

Create a supplier diversity policy
Make sure that you create a supplier diversity policy, which draws on the business case and links with the organisations mission, objectives and strategy.

Review procurement policies, procedures and practices
Make sure that the organisation reviews its procurement policies and practices in order to reduce/remove existing barriers to suppliers.

Make opportunities accessible
The organisation should provide a consistent through-flow of opportunities for which suppliers are given the chance to be acquainted with the procurement process.

Monitor performance
When monitoring performance you could:

  • Measure the amount you spend each year with diverse suppliers
  • The percentage increase on the previous years spend
  • A timeline with the next years progression
  • The number of new suppliers, and the number of diverse suppliers

Communicate with and educate your stakeholders
It is important that the organisation demonstrates active commitment to supplier diversity by providing informational seminars/training to Procurement professionals and other stakeholders. This to ensure, that your efforts are systematic and create organisation-wide awareness. If there are good case stories then these should be communicated to the stakeholders. It is important to integrate supplier diversity thinking in the whole organisation.

Responsible Procurement Excellence has specialized in helping companies around the world develop and integrate an actionable approach to Responsible Procurement. An actionable approach goes beyond compliance, has a positive effect on the reputation, raises efficiency and generates revenue.

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Contact Responsible Procurement Thought Leader Alis Sindbjerg Hemmingsen if you want to know more about Supplier Diversity.

You can also download the e-book: Supplier Diversity in Europe right here.

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