The Power of Supplier Diversity

May 19, 2020

A supplier diversity program is a proactive business program which encourages the use of women-owned, ethnic/minority-owned, veteran-owned, LGBTQ-owned, disability-owned, and small businesses as suppliers.

This report covers the findings from quantitative and qualitative research conducted by the ANA. The purpose was to gain an understanding of the incidence of supplier diversity programs as well as benefits, challenges, spend, goals, measurement, influence, and more.

Key findings include:

  • Incidence: 75 percent of respondents have a supplier diversity strategy for the organization overall; 40 percent have a supplier diversity strategy specifically for marketing/advertising.
  • Segments: For those with a supplier diversity strategy, the top segments targeted are women-owned (98 percent), ethnic/minority-owned (95 percent), veteran-owned (90 percent), LGBTQ-owned (88 percent), and disability-owned (80 percent).
  • Top Benefit: The top-rated benefit of a supplier diversity strategy is community empowerment and positive social impact (for the community).
  • Top Challenges: The top challenges are: (a) Visibility to opportunities to recommend diverse suppliers and (b) Finding diverse suppliers.
  • Age: Supplier diversity strategies are older within the organization overall than they are for marketing/advertising.
  • Maturity: The majority of respondents (57 percent) classify the maturity of their supplier diversity strategy as "established," 23 percent are "advanced;" only 20 percent are "beginning."
  • Org Structures: 40 percent of respondents have a dedicated individual who spends 50 to 100 percent of their time focused on supplier diversity; 35 percent have a team assigned to supplier diversity duties.
  • Spend: Spend with diverse suppliers was much more likely to increase than decrease from 2018 to 2019; for many respondents, spending stayed the same.
  • Goals: The great majority of respondents (87 percent) report that their companies have specific goals around supplier diversity. Many respondents cite those goals as being an increased percentage of spend or increased actual spend to diverse suppliers.
  • Part of the "Trifecta": Supplier diversity is part of the "trifecta," alongside diversity and inclusion and multicultural marketing. Respondents expressed the highest level of commitment for diversity and inclusion (78 percent), followed by supplier diversity (58 percent) and multicultural marketing (54 percent).

According to a member who participated in a qualitative discussion:

  • "This report is unique given its perspective on marketing. Marketing and advertising may be the last horizon — the last uncharted territory — for supplier diversity professionals. My hope is that the ANA broadly shares this with the marketing industry to increase understanding of the power of supplier diversity."

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Source

"The Power of Supplier Diversity." ANA, 2020.