Why your Organisation Should be Investing in a Supplier Diversity Manager

Supply Nation’s corporate Members are increasingly interested in hiring dedicated Supplier Diversity Managers. They realise that, without someone owning their supplier diversity programs, it will be difficult to not only increase their spend with Certified Indigenous Suppliers but also mitigate any perceived or actual risk in the procurement process. They also realise the need to make the most out of their Supply Nation Membership.

Here are five reasons why your organisation should consider employing a dedicated Supplier Diversity Manager.

1)       The Supplier Diversity Manager will define the commercial benefit of Supplier Diversity for your organisation.

Supplier Diversity is not just about Corporate Social Responsibility. If resources are devoted, a supplier diversity program can accrue many benefits to the organisation, which can either boost profits, lower costs or provide efficiency with innovation not previously experienced by that corporate.

Many corporates who have their suppliers as their customers accomplish mutual commercial benefit, whilst maintaining integrity and transparency. This alignment of values often helps both organisations revenue goals. A ripple effect is created — almost like a loyalty card. Families and friends of those Indigenous businesses may also “buy” products from that main corporate.   Industries that have a retail client base – high-street retailers, banking, telecommunications or insurance are prime for supplier diversity as a revenue opportunity. The key to success here is to maintain transparency of communication between the Indigenous business and your own corporate goals, maintain objectivity and ensure central focus on the net benefit to your own organisation. 

This is the kind of commercial problem-solving a Supplier Diversity Manager will bring to the program. It is not limited to retail, business to business, or business to government relationships — which also have an opportunity to realise the benefits of supplier diversity in their tenders.  If a corporate member does not know how their supplier diversity program is either increasing revenue or driving savings, then they are probably missing out on an opportunity to improve their bottom line. 

2)      A Supplier Diversity Manager  implements change

The Supplier Diversity Manager, who should have experiential understanding of procurement, can lead change in your organisation’s supply chain. Kaljit Bhachu, one of Australia’s first Supplier Diversity Managers and this year’s Supply Nation Supplier Diversity Advocate of the Year Award Winner, said “like in all good procurement strategies, the role of procurement professional is to act as a change agent, not just the head negotiator or the contract manager.  The Supplier Diversity Manager is no different — they are change managers.

 “A Supplier Diversity Manager,” Ms Bhachu continued “who is interested in the sustainability and long term productivity of a supplier diversity program, will turn purchasing from Certified Suppliers into a collaborative and organisation-wide way of thinking. The Supplier Diversity Manager will understand the procurement function’s concerns and organisational risks and recommend ways to overcome them.  The Supplier Diversity Manager will acknowledge supplier diversity is an extra consideration which requires resources both in time and effort and will be the missing link ensuring executive buy-in to operational delivery. ”

“The Supplier Diversity Manager is essentially an advocate.” Ms Bhachu said, “The vision is that supplier diversity is part of the procurement thinking – just like it is with risk assessment, safety regulation, environmental management, and insurance. It’s just another aspect that should be considered when making procurement decisions, which should become the norm for all commercial procurement folk”.

The role of the Supplier Diversity Manager is to support and provide advice on that consideration, just like a risk manager in Group Risk does, and a HR manager does.

3)      The metrics developed by a Supplier Diversity Manager will allow employees to be honest and understand their contribution to social impact and demonstrate commitment to supplier diversity.

Peter Drucker, who is sometimes referred to as ‘the founder of modern management’ famously once said ‘if you can’t measure it, you can’t improve it.’ This principle holds for a supplier diversity program. The organisation should not only report the dollars spent with Indigenous businesses, but also assess  the impact of those dollars, the sustainability of the program, the diversity of the types of contracts awarded, and the capacity built both internally and with Certified Suppliers. Ms Bhachu explained that relationship building at all levels in the organisation is a critical success factor.  “Understanding that Procurement, Corporate Social Responsibility teams, project teams, and C-level executives will all be interested in supplier diversity at various levels and will contribute to different metrics, is essential. It is necessary that there is a dedicated resource who can translate those needs and work with analysts to deliver those metrics for sustainable change and continued success of the program.”

 A dedicated Supplier Diversity Manager, will have the capability, time, and accountability to develop and monitor these metrics on a regular basis, ensuring that they are reported publicly at least with their own organisation.

Once a clear and regularly reported metric is established that measures the impact, sustainability, cost, and benefits of the program it will naturally hold the organisation to account. It will educate procurement employees and inform their decision making. The Supplier Diversity Manager will be able to identify, very quickly, which teams need more help, what contracts will have the maximum impact, and what the benefits are to your organisation for continuous improvement


4)      The Voice to both the procurement function and the Certified Suppliers

There is often a barrier in open communication between procurement teams and Certified Suppliers. Certified Suppliers might feel anxious about their knowledge level, while procurement professionals can be time poor or not focussed on supplier development.  Suppliers and procurement teams can both end up frustrated with each other and not meeting the goals set by that organisation. A Supplier Diversity Manager is an intermediary and advocate of these two parties.  

Ms Bhachu believes “a Supplier Diversity Manager acts as a broker between the procurement function and the Certified Suppliers. When talking to procurement the Supplier Diversity Manager is advocating on behalf of the suppliers and the supplier diversity campaign. When talking to suppliers, the Supplier Diversity Manager helps them understand organisational requirements and complexity.”

5)      It shows commitment

For organisations in the business of winning government contracts, this is a big one. Government is constantly looking for ways to divert spend. If a purchase of a good or service can also reduce tax payers dollars spent elsewhere in government, that purchase will be looked upon favourably. Government recognises that supporting a vibrant Indigenous business sector will reduce costs for government, in the sectors of education, welfare, and health.

For example, preference will be given to non-Indigenous organisations which have an active supplier diversity program engaged with certified indigenous businesses. Having a Supplier Diversity Manager demonstrates to government and other customers that you are serious about the program and that it is more than just a tick box exercise.

Having a person or a team that owns the supplier diversity program at your organisation is the most effective and efficient way to grow your engagement with Certified Suppliers.  The Supplier Diversity Manager will show your organisation the hard commercial benefit of engaging in supplier diversity. This is the true value of a dedicated supplier diversity resource.