In a resilient display of commitment, buyers have stood firmly behind supplier diversity initiatives, even amid challenging economic conditions. Supplier.io’s recently released “2023 State of Supplier Diversity Report” reveals that nearly two-thirds (59%) of respondents have not wavered in their financial support for supplier diversity, while 23% have actually accelerated their efforts in this regard.
Sourcing managers emerged as the most supportive level of management (70%), followed closely by senior management (61%) and CEOs (52%).
However, the report also highlights data-related challenges as a significant hurdle in strengthening diversity initiatives. Approximately 29% of respondents cited issues surrounding data accuracy, while 5% identified audits as their primary challenge.
Interestingly, the report found that 67% of respondents rely on third-party data to monitor supplier diversity status, marking a notable shift from the previous year when this method ranked third.
As a result, “tracking and reporting metrics” surfaced as the number one supplier diversity challenge that requires attention, surpassing other concerns such as advocacy and meetings with businesses, supplier discovery, and onboarding new suppliers.
Commenting on these findings, Aylin Basom, CEO of Supplier.io, emphasized the evolving drivers behind supplier diversity. She noted that while compliance with government regulations was a primary motivation a few years ago, customer requirements have now taken precedence.
Basom added that supplier diversity aligns not only with a company’s values and culture but also holds corporate value by enhancing supply chain competitiveness, a crucial factor in the current economic landscape.
The report also sheds light on the accelerating momentum of supplier diversity efforts. Seven in 10 (72%) of respondents reported having clearly defined supplier diversity goals, up from 68% in the previous year. Furthermore, 48% now incorporate supplier diversity metrics into their management performance objectives, compared to 36% the previous year.
Additionally, two-thirds (67%) of respondents have established an annual supplier diversity plan.
For organizations looking to embark on their supplier diversity journey, Basom recommends starting with a comprehensive understanding of their existing supplier base before setting goals. This understanding can help identify key performance indicators (KPIs) that align with the organization’s core objectives, such as innovation or competitiveness.
Basom shared the example of Meta (formerly Facebook), which, by diversifying its supply chain, experienced heightened innovation. Smaller, diverse suppliers demonstrated agility and creativity, offering fresh and inventive ideas compared to larger, more rigid suppliers.
In conclusion, the report illustrates that supplier diversity remains a resilient and strategic commitment among buyers. As the landscape evolves, organizations are increasingly aligning with the values and corporate culture while recognizing the tangible value it adds to their supply chains and overall competitiveness. Proactive engagement and data-driven strategies are pivotal in this journey towards more inclusive and innovative supply chains.