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What is Supplier Diversity? – Definition

What is Supplier Diversity? – Definition

Supplier diversity is a business practice that encourages organizations and companies to utilize suppliers that are representative of the communities in which they do business. This includes minority-, women-, LGBTQ+, veteran-, and disabled-owned businesses, among others. The primary aim of this practice is to ensure that all diverse populations have access to and are able to compete for contracts or other business opportunities. Supplier diversity is not only a tool for increasing economic opportunity, but it also helps foster an open and inclusive workplace environment. In this blog post, we will explore what supplier diversity is and why it matters.

What is supplier diversity?

Supplier diversity is the proactive pursuit of a broad range of suppliers to promote competition, facilitate market access, and stimulate economic development. The supplier diversity program creates an environment in which all suppliers can compete for business on a level playing field.

The supplier diversity initiative began as a response to the Civil Rights Act of 1964, which outlaws discrimination in public accommodations and federal programs. In order to ensure that minority-owned businesses were not excluded from participating in government contracting, the Small Business Administration implemented the 8(a) Business Development Program. This program provides assistance to small disadvantaged businesses in obtaining government contracts.

In order to further promote supplier diversity, large corporations began implementing their own supplier diversity programs. These programs typically set goals for the percentage of purchases made from minority-owned businesses. Many corporations have found that supplier diversity not only helps them meet their social responsibility goals, but also makes good business sense. Purchasing from a diverse group of suppliers can help reduce costs and risk, while also providing access to new markets and innovative products.

The benefits of supplier diversity

When it comes to supplier diversity, the benefits are numerous. For one, it can help businesses tap into new markets and better understand the needs of underrepresented groups. Additionally, supplier diversity can lead to cost savings for businesses by diversifying their supply chains and increasing competition.

But perhaps most importantly, supplier diversity is simply the right thing to do. By partnering with diverse suppliers, businesses can help foster economic growth and opportunity for all. When everyone has a seat at the table, we all benefit.

The challenges of supplier diversity

Supplier diversity can be defined as the proactive marketing to and utilization of businesses owned by racial or ethnic minorities, women, persons with disabilities, and service-disabled veteran enterprises.

The goal of supplier diversity is to create a competitive environment in which all suppliers have an opportunity to compete for business on an equal basis.

However, achieving supplier diversity can be challenging for organizations. Some of the challenges include:

1. Lack of awareness: There may be a lack of awareness among decision-makers about the importance of supplier diversity or how to go about achieving it.

2. Limited resources: Organizations may have limited resources dedicated to supplier diversity initiatives.

3. Difficulties identifying diverse suppliers: It can be difficult for organizations to identify potential diverse suppliers, especially if they are not actively marketed to by those suppliers.

4. Resistance from within the organization: There may be resistance from some members of the organization who do not see the value in supplier diversity or who may feel that it is unfair to prefer one type of supplier over another.

How to create a supplier diversity program

Supplier diversity is the inclusion of businesses owned by members of groups that are typically underrepresented in the supplier pool of an organization. The goal of supplier diversity programs is to create opportunities for all suppliers, including those from traditionally underrepresented groups, to compete for business contracts.

Organizations can create supplier diversity programs in a variety of ways. One way is to set a goal for the percentage of total spend that goes to diverse suppliers. Another way is to create tiers within the supplier diversity program, with different levels of benefits and preferences given to suppliers at each level. Additionally, organizations can create mentorship or networking programs pairing diverse suppliers with larger, more established companies.

There are many benefits to creating a supplier diversity program. By increasing the number of diverse suppliers that an organization does business with, it can increase its pool of potential vendors, create new business opportunities, and improve its reputation. Additionally, supplier diversity programs can help build relationships with local communities and foster economic development.


In conclusion, supplier diversity is a critical practice for organizations to adopt in order to ensure equal opportunity and access to goods and services. It helps create an environment of fairness, competition, and inclusion that benefit both businesses and the individuals they serve. Adopting supplier diversity policies can also help organizations build stronger relationships with their suppliers while helping them increase their customer base through more diverse offerings. By embracing supplier diversity, your organization can become more competitive and profitable by creating opportunities for all segments of society.

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