Essay on Supplier Diversity in Procurement and Materials Management

Published: 2021/11/22
Number of words: 847

Are companies owned and run by historically underrepresented or disadvantaged persons or groups (Lightfoote et al, 2014). Among them are small and minority-owned enterprises, as well as women-owned firms (WBEs). The idea of diversity has evolved over time to include business owners who identify as LGBQT, veterans, or have impairments.

To build a diverse supply chain in America, civil rights movements of the 1950′ and 1960′ played a key influence. After the racial riots in Detroit in 1968, General Motors launched one of the first dealer diversity agendas, and the rest of the American automobile industry shadowed suit. As initial adopters in the electronics sector, such as IBM started to pursue measures to increase supplier variety (Sugrue, 2014). Public Law 95-507 created a sequencer to encourage government independents to include minority-owned companies in their stream chains.

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For example, a company may utilize supplier diversification programs to uphold high moral and ethical standards. Because of a company-wide commitment to be more inclusive and do what’s right in 1992, says UPS’ Kris Oswold, global supplier diversity vice president. Small and diverse suppliers account for $2.6 billion in annual costs.

When it comes to finding and assisting new, diverse suppliers in the early phases of growth, the UPS package has advanced. In the United States, the Hispanic Slot of Commerce, the Women’s Business Enterprise National Council, and the National Minority Supplier Development Council are a few examples. As part of this effort, there will be workshops and professional matching at supplier diversity conferences, as well as expanded chances for capital investment and administration education.

Comprehensive obtaining also provides economic possibilities for underserved groups. As of 2018, the United States is expected to have 8 million minority-owned companies (McKinney, 2021). MBEs, according to the NMSDC, generate $400 billion in economic activity, 2.2 million jobs, and $49 billion in yearly tax revenue for local, state, and federal tax authorities. These statistics are on the increase.

It spends over $800 million a year on suppliers and plans to spend more than $1 billion by the end of 2020 to encourage growth (Tubb et al. 2021). To learn more about the importance of diversity efforts in encouraging minority populations to establish companies, check out this interview with Coca-Thompson, Cola’s Vice President of Global Supply Inclusion and Diversification (Siu, 2021). An institution was founded four years ago by Coca Cola in partnership with UGA with the goal of educating low-income and underserved populations about beginning a business (Goad, 2021). STEP is a Coca-Cola initiative that aims to inspire women to become entrepreneurs.

To increase the company’s impact, several large businesses encourage and even need their dealers to generate their own diversity programs (Vairavan, 2021). For the year 2019, Target spent $1.4 billion on items and services supplied by first-tier diverse suppliers, and it encouraged its first-tier diverse providers to acquire over $800,000 worth of offers from second-tier varied providers (Enderwick, 2020). Employer-sponsored supplier diversity initiatives are an important recruiting tool. In a UPS survey conducted by Hootology, 52 percent of respondents said they wanted to work for a corporation that has a contractor diversity and insertion package in place. We had never considered informing candidates about our supplier diversity initiatives prior to the research,” she added.

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By increasing supplier variety and competition, inclusive purchasing methods can improve product quality and lower prices for the organization’s procurement department (Mwangi, 2021). Additionally, it improves supply chain flexibility and resiliency. Difficulty in securing contracts has resulted in the evaluation of various providers. He added: “They have proved themselves to be nimble in reaction.”.

A supplier diversity package may be problematic to implement in the nearby future in specific sectors, such as military, where there are very few eligible vendors. Although these initiatives are aimed at combating racial discrimination, most big corporations see them as a chance to grow their operations and become more competitive.


Blount, I. Y. (2021). How do large purchasing organizations treat their diverse suppliers? Minority business enterprise CEOs’ perception of corporate commitment to supplier diversity. Business & Society, 60(7), 1708-1737.

Enderwick, P. (2020). The competitive challenge of emerging markets: China and India. Cambridge Scholars Publishing

Goad, S. D. (2021). Experiences of First-Generation Undergraduate Students at a Public Research University (Doctoral dissertation, University of Georgia).

Lightfoote, J. B., Fielding, J. R., Deville, C., Gunderman, R. B., Morgan, G. N., Pandharipande, P. V., … & Macura, K. J. (2014). Improving diversity, inclusion, and representation in radiology and radiation oncology part 1: why these matter. Journal of the American College of Radiology, 11(7), 673-680.

McKinney, F. (2021). Supplier Diversity: A Mechanism for Supporting Minority Entrepreneurship. The Palgrave Handbook of Minority Entrepreneurship, 465.

Mwangi, N. W. (2021). Influence of Procurement Cost Optimization on Performance of Manufacturing Firms in Kenya. International Academic Journal of Procurement and Supply Chain Management, 3(2), 193-214.

Sugrue, T. J. (2014). The origins of the urban crisis. Princeton University Press.

Siu, B. (2021). Opening Doors to Diversity in Leadership. University of Toronto Press

Tubb, C., & Seba, T. (2021). Rethinking Food and Agriculture 2020-2030: The Second Domestication of Plants and Animals, the Disruption of the Cow, and the Collapse of Industrial Livestock Farming. Industrial Biotechnology, 17(2), 57-72.

Vairavan, A. K. (2021). Growing The Pie: How Supplier Diversity Can Enable Minority Businesses to Create Stakeholder Value.

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