Supplier Diversity: Who's Doing and Marketing it Well? And Does it Sacrifice Savings?

Supplier diversity is imperative in a global, multi-cultural business market, but it can be challenging to reconcile supplier diversity initiatives with cost-cutting initiatives. According to a 2006 study by The Hackett Group, companies can expand their supplier diversity programs without sacrificing savings.

So who's doing it well, and how are they doing it? DiversityInc lists the top ten companies for supplier diversity. Although AT&T didn't make the list, its worth noting that in 2006, supplier diversity was a factor in generating $11 billion in revenue for the company. Here are the top five from DiversityInc's list:

1. Xerox -- A long-time supplier-diversity leader, Xerox sends 30 percent of its procurement budget with Tier I minority- and women-owned suppliers. The company also includes GLBT suppliers in supplier-diversity tracking, compared with 22 percent for the Top 50 and virtually no other companies nationwide. Xerox also audits its supplier-diversity numbers.

2. Sempra Energy -- The California utility spends 19 percent of its procurement budget with Tier I minority- and women-owned suppliers, audits its supplier-diversity numbers and ties procurement compensation to successful supplier-diversity results.

3. Comerica -- The Detroit-based bank spends 33 percent of its procurement budget with Tier I minority- and women-owned suppliers, a staggering amount. They obtain that percentage by calculating opportunity dollars, which include all of the dollars with goods/services in areas where M/WBEs have the opportunity to participate. They examine all of the businesses with delegated purchasing responsibility and look at their budgets for a year. They do take into account if there is an area where they know there is not a large pool of suppliers and they may exclude that area, but the company says very few areas are excluded. Comerica also integrates supplier-diversity initiatives into its overall corporate-business-plan goals and provides formal external training or mentoring programs for suppliers.

4. Hewlett-Packard -- HP spends 29 percent of its procurement budget with Tier I minority- and women-owned suppliers, audits its supplier-diversity numbers and provides financial assistance for diverse suppliers.

5. Consolidated Edison Company of New York -- This company spends 14 percent of its procurement budget with Tier I minority- and women-owned suppliers and provides formal external training or mentoring programs for suppliers.More About Supplier Diversity:

The Evolving Case for Supplier Diversity, "Supply & Demand Chain Executive"

How to Maximize Your Company's Supplier Diversity Efforts, BLH Consulting

Good News: Making Your Supplier Diversity Program Work (Nine Tips), Baker & Daniels, LLP

(Diversity Image courtesy of Thiru Murugan, cc 2.0)