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What is a Supplier Diversity Kpi? – Definition

What is a Supplier Diversity Kpi? – Definition

If you’re in the business world, chances are you’ve heard the term “supplier diversity KPI.” But what does it actually mean? A supplier diversity KPI is an important measure of a company’s commitment to using diverse suppliers. It can be used to gauge how well a company is doing in terms of meeting its commitment and goals for supplier diversity. In this blog post, we will discuss the definition of a KPI, what it measures, why it matters, and how to use it effectively in your business. Read on to learn more about supplier diversity KPIs and their implications for your company.

What is a Supplier Diversity Kpi?

Supplier diversity is a business metric used to track the percentage of spend with diverse suppliers.

There are a number of different ways to calculate supplier diversity, but all follow the same general principle: tracking the percentage of total spend that goes to suppliers who are owned by members of traditionally underrepresented groups.

This includes, but is not limited to, businesses owned by women, minorities, LGBTQIA+ individuals, veterans, and people with disabilities.

Supplier diversity can be tracked at the company level or the global level. For example, a company may have a goal of ensuring that 25% of their total spend goes to diverse suppliers.

Alternatively, a global organization may aim to increase the overall percentage of spend with diverse suppliers from 10% to 15%.

Supplier diversity KPIs are important because they help companies ensure that they are doing their part to support marginalized communities and promote social and economic justice.

They also help organizations keep track of their progress towards meeting their goals in this area, and can identify areas where further action is needed.

The Importance of a Supplier Diversity Kpi

Supplier diversity KPIs are important performance indicators that can help organizations track and improve their efforts to promote supplier diversity. By tracking supplier diversity KPIs, organizations can gauge the effectiveness of their supplier diversity initiatives and identify areas for improvement.

There are a number of different supplier diversity KPIs that organizations can track, but some of the most important include:

• The percentage of total spend with diverse suppliers

• The number of new diverse suppliers added to the approved vendor list

• The percentage of employees who self-identify as belonging to a minority group

• The number of training hours devoted to supplier diversity education and awareness

Organizations should choose the supplier diversity KPIs that are most relevant to their specific goals and objectives. Tracking supplier diversity KPIs can help organizations improve their overall performance and make progress towards their goals.

How to Implement a Supplier Diversity Kpi

When it comes to supplier diversity, there are a few key performance indicators (KPIs) that organizations can track to ensure progress is being made. Here are a few examples of how to implement a supplier diversity KPI within your organization:

1. Spend with diverse suppliers: This KPI tracks the percentage of total spend that goes towards working with diverse suppliers. In order to accurately track this number, be sure to categorize your suppliers by race, ethnicity, gender, and other relevant diversity factors.

2. New supplier hires: Another way to measure progress is by tracking the number of new supplier hires that come from diverse backgrounds. This number can be tracked monthly or quarterly to see if your organization is making strides in diversifying its supplier base.

3. Diverse spend as a percentage of total procurement: This KPI takes into account the entire procurement process and measures the percentage of total spend that goes towards working with diverse suppliers. This number can be used as a benchmark for future goal-setting.

4. Supplier Diversity Training Programs: Many organizations offer training programs for their employees on how to work with diverse suppliers. Tracking the number of employees who participate in these programs can give you insights into how seriously your team takes supplier diversity initiatives.

Best Practices for a Supplier Diversity Kpi

There are a few things to keep in mind when creating a supplier diversity KPI. First, consider what data you have available and how best to track it. For example, you may want to track the number of suppliers who are certified as diverse businesses. Alternatively, you may want to track the percentage of total spend that goes to diverse suppliers.

Once you’ve decided on the metric or metrics you want to track, establish target values for your KPIs. These targets should be ambitious but achievable, and should be reviewed and updated on a regular basis. Finally, make sure you have a system in place to report on progress towards your targets; this could be as simple as a monthly report or an annual review.


Supplier diversity KPIs are metrics used to measure the performance of companies in terms of their inclusion and engagement of suppliers from diverse backgrounds. A successful supplier diversity KPI goal should align with a company’s corporate values and create an atmosphere where everyone is given equal opportunities regardless of culture, gender, or background. Through these key performance indicators, businesses can gain insight into how effectively they support all types of suppliers in order to improve their services for customers. Ultimately, supplier diversity KPIs allow organizations to ensure that all members involved in the supply chain system have a voice at the table in order to drive success for years to come.

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