Education procurement is taking a closer look at how supplier diversity can reduce risk and support every stakeholder—especially in challenging times. Here are six ways a more diverse and inclusive supplier community can help your institution thrive.
The US Department of Commerce notes that minority purchasing power is increasing and will represent 70% of total growth between 2000 and 2045. Diverse businesses and consumers will drive much of the world’s economic growth and will be integral to the success of any organization.
So, what is a diverse supplier? Any company-owned or operated by at least 51% of minority individuals or groups, including LQBTQ+, small business enterprises (SMBs), women-owned enterprises, and veterans and minority-owned enterprises (MBEs). Why search out diverse suppliers?
Here are just a few reasons:
It is socially responsible
- Education institutions have a lot of purchasing power and their needs are broad. Increasingly, calls for supply chain diversity are being mandated at the state and local levels so everyone has an equal share of the pie.
- Integrating diverse suppliers into your procurement processes supports local communities and levels the playing field for smaller companies that are at a disadvantage when competing with large enterprises.
It attracts students
- The public demand for organizations to be more socially responsible extends to colleges and universities. Young people in particular expect businesses to operate in more sustainable, ethical, and conscientious ways.
- Students expect colleges and universities to reflect their values–and that extends to how those institutions conduct business.
- Increasingly, young people are seeking ways to direct their dollars to sustainable practices and enterprises. Institutions need to demonstrate that they are working toward a more diverse and sustainable supply base.
It reduces risk
- During the pandemic, organizations experienced slow delivery due to sudden closures or lockdowns here and abroad. In response, many organizations are choosing to relocate their partnerships closer to home in order to speed delivery, improve communications and reduce risk.
- Additionally, by relying on a more diverse supply base, institutions are less likely to be derailed by shortages or business closures.
It provides greater flexibility
- This past year has required institutions to find sources for new goods such as Covid tests and other unique PPE.
- When traditional suppliers were unable to cope with demand, smaller, more diverse suppliers stepped in–often with unique solutions.
- Institutions working with smaller businesses have also found that making process changes is easier–such as switching from central delivery to home delivery.
It encourages economic growth
- After the Great Recession, startups and small enterprises created 7 million of the 10.9 million jobs that helped Americans get back on their feet.
- The creation and preservation of jobs produce billions of dollars in revenue.
- Diversity is also a key driver of business innovation, encouraging different perspectives and new ideas.
It builds stronger community relationships
- By diversifying their supplier base, institutions are stimulating local businesses which, in turn, generate more jobs to build more wealth in the community.
- Institutions with more diverse supplier networks earn the respect of their communities and can work more collaboratively with their neighbors.
- With stronger relationships in place across diverse communities, institutions can create new partnerships, such as service-learning and work experience programs.
Developing a more diverse supplier base is a journey, but the effort is worth it. Supporting a diverse supplier base can help your institution build its reputation for equity, improve stakeholder relationships, and even help drive enrollments. For your communities, diversifying the supplier-based can help rebuild economies and support a more green environment.
Educators need educated buying