The Ever-Changing Value Proposition of Supplier...
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The Ever-Changing Value Proposition of Supplier Diversity Trends in present-day market development and beyond
Transcript of The Ever-Changing Value Proposition of Supplier...
The Ever-Changing Value
Proposition of Supplier Diversity
Trends in present-day market development and beyond
Supplier Diversity: Definition & History
Supplier Diversity is defined as “A proactive business process that seeks
to provide all suppliers equal access to purchasing opportunities”
•Initially to address government and corporate social responsibility
•Response to race riots caused by social and economic inequalities
•Enactment of 1964 Civil Rights Act
•Passage of Public Act 95-507
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Diverse Business Classifications(51% owned, operated and controlled)
Small businesses
Small disadvantaged businesses
Women-owned small businesses
Minority-owned businesses
Veteran-owned small businesses
Service disabled veteran-owned small business
LGBT-owned businesses
Evolution of Supplier Diversity
Value Proposition1970s - 1990s Minority Purchasing Programs
Government
Compliance
Good
Corporate
Citizen
Purchasing
Department
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Why This? Why Now?
Customer Expectations
Increasing number of corporate RFPs/contracts are requiring MWBE participation
Typical bid assigns 5% - 20% for M/WBE participation
All government bids require MWBE and other diverse business participation
Plays critical role in customer retention and expansion
© 2010 RGMA, Inc.
The Face of Tomorrow
20%
80%
24%
76%
30%
70%
38%
62%
49% 51%
1980 1990 2000 2020 2050
Minorities Non-Minorities
Source: U.S. Census Bureau
“To put this into perspective, there are more
minorities in this country today than there were
people in the United States in 1910. In fact, the
minority population in the U.S. is larger than the
total population of all but 11 countries.”
-Louis Kincannon: Census Bureau Director
Minority Population Tops 100 Million!
Data Source: U.S. Census Bureau
Customers with Reporting
Requirements
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Customers seeking
Diverse Solutions
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FINANCIAL SERVICES & INSURANCE
HIGH TECH & TELECOM & TECHNOLOGY
ENERGY & UTILITIES
HEALTHCARE & PHARMACEUTICALS
MANUFACTURING
CPG & RETAIL
FOOD & BEVERAGE
AUTOMOTIVE & TRANSPORT
MEDIA & ENTERTAINMENT
BUSINESS SERVICES
ENGINEERING & CONSTRUCTION
HOTELS & HOSPITALITY
WHOLESALE & DISTRIBUTION
84% of Fortune 1000 Companies have
Diversity Spend Targets
87% of Fortune 1000 Companies have
Diversity Spend Targets
91% of Fortune 1000 Companies
have Diversity Spend Targets
Source: DiversityBusiness.com
Supplier Diversity in Recent Years
2012
2013
2014
Present-Day Definition of Supplier
Diversity
A business strategy that seeks to
leverage the expertise of diverse
businesses in providing solutions to
the supply chain, corporate
customers, and government.
Supplier
Diversity
The New Way of Thinking
Strengthens your brand with key
stakeholders
Proactive response to customer
expectations
Compliments commitment to economic
development
Helps grow market share, account
retention, and new customer
acquisition
Supplier Diversity Program Definition
• Customer/Client driven
• strategic business imperative
• Client/Customer Retention strategy
• An enhancement to the corporate reputation
• New business acquisition and sales enablement strategy
• handout/quota-based
• social program
• compromise of quality service
or cost
• Solely owned by Strategic
Sourcing or Supplier Diversity
What it IS What it is NOT
Conscious Consumerism
