From Supplier Diversity to Economic Inclusion: A Sustainable Model Driving Social and Business Value

Abstract

Companies have been launching supplier diversity programs for decades. However, these programs are not a truly sustainable inclusion ecosystem fostering competitive advantage for buyers, suppliers and society. Companies are recognizing the potential of supplier diversity programs in business growth, such as response to the changing demographics and benefits including innovation and flexibility. Yet, challenges remain. Utilizing seven pillars of economic inclusion borrowed from the sports literature, this research aims to help companies develop sustainable diversity programs. This comes through development of an inclusive culture, procurement competencies, strategies, ecosystem, appropriate governance and structure, planning for and being able to measure inclusivity, and communication with stakeholders. Interviews with companies engaged in supplier diversity programs and also a number of supplier diversity councils were conducted. Secondary data were then collected to understand how companies are faring along the seven pillars of inclusivity. A maturity model is proposed to help companies build a sustainable supplier diversity and economic inclusion mindset to achieve social and business value.