SUPPLIER DIVERSITY
Supplier Diversity Notes:
Spend Doesn’t Matter
DiversityBusiness.com with
Mission
with reaching the Mission. In fact, it
over 48,000 members nationally and significantly imbeds progress in ad-
over 500,000 small businesses using Given, it’s been clear for the last dressing items 1 and 2.
our services receives feedback from few years that supplier diversity ex-
business owners who usually talk ists for 3 main reasons:
Supply Chain Strategy
about two main themes. 1. To increase market share within
multicultural/diverse communities. The move to have fewer suppliers
1. Focus of large corporations on 2. To include companies in the with a large spend has certainly cre-
growing well established diverse supply chain owned by historically ated some very large and successful
companies under represented groups thereby diverse owned companies. Or has it?
2. Too much attention to “Spend” creating wealth for these groups. If one were to take a close look at the
figures. 3. Government contract spend percentage of ownership, the number
Well, we all know that supply chain requirements. of diverse employees, the location of
strategies require a supplier to have a the company and where its employees
minimum scale and scoop to enable Everyone has created a goal to in- reside you will find not only are we all
global competitiveness of its custom- crease year over year diverse spend. participating in smoke screen results
ers and in a major corporation: “What From the data presented below, it is but very few times are we creating
Gets Measured Gets Done”. proven that the mission hasn’t been generational wealth for a diverse busi-
achieved and has nothing at all to do ness. The reason for the latter is most
companies that pass over $100 mil-
lion dollars in annual revenue have
establish themselves as high quality,
profitable and sustainable companies
that become the target for takeover’s
by non-diverse companies.
Hiding behind Certification?
To make matters worse, I estimate
that nearly 30% of reported diverse
spend is going to companies owned
by individuals that have been in the
United States less than 12 years. The
employees of these companies, while
being a high percentage diverse, are
also highly educated and most have
advanced degrees. They average be-
ing in the U.S. less then 7 years. So the
question is, what communities are we
reaching that have been historically
underrepresented and why is this
spend considered supplier diversity?
One would need to know the his-
tory of certification, when and why
it came about and the decisions to
include certain groups to appreci-
ate why it has no place in the current
marketplace.
16 HISPANIC NETWORK MAGAZINE Celebrating 18 Years of Diversity
www.hnmagazine.com
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