Enterprises continue to view supplier diversity as a value-generating supply chain strategy and are implementing programs as planned, according to the 2023 State of Supplier Diversity report, which was released today by Supplier.io. The research found most businesses (69%) report that the current economic climate has had minimal impact on their supplier diversity programs, and 89% expect business support to stay the same or increase in the upcoming year.
A notable 66% of those surveyed cited supply chain competitiveness (cost savings, risk reduction, innovation, etc.) as a primary driver for their supplier diversity program. The research also found few organizations are investing solely for corporate, regulatory or societal requirements. In fact, when evaluating the business drivers of supplier diversity, implementing for customer requirements and government compliance were down 33% and 27%, respectively, over the past six years.
“Supplier diversity remains an intentional and essential supply chain strategy,” said Aylin Basom, CEO of Supplier.io, in a statement.. “Our research continues to show wide-ranging investments in diverse businesses of all types – including SMBs, veteran- and women-owned businesses, minority-owned organizations and more. Programs have matured substantially over the past few years, resulting in a bigger impact for the businesses and across the global economy.”
The State of Supplier Diversity report was compiled based on insights from hundreds of respondents, 67% of which work at organizations with revenues of $1billion or higher. Select findings from the research include:
- Companies won’t be shy about promoting their supplier diversity programs, despite the political environment. Only 7% said they plan to publicly promote their programs less moving forward; 38% said their public promotion would stay the same, and 16% indicated public promotion would increase.
- Executive support and program accountability increases in 2023. A remarkable 97% said executive support remains consistent or better compared to last year; 72% of companies now have clearly defined supplier diversity goals, up from 68% last year; nearly half (48%) include supplier diversity metrics in management KPIs.
- The business value of supplier diversity remains strong and broad. In addition to supply chain competitiveness, companies are investing in supplier diversity to enhance their brand image (53%), win new business (46%) and align with corporate culture and workforce inclusiveness (81%).
- Supplier diversity programs help drive ESG performance, while standing on their own. 55% said supplier diversity helps drive their organization’s overall ESG strategy.
- Data is the pillar of supplier diversity. 67% are now using third-party data services to improve supplier diversity programs, a 44% increase over 2022. 56% report that the diversity data they have access to has improved compared to last year.
“Reliable data remains the lifeblood of supplier diversity programs,” said Basom. “Our research found that three of the top four challenges associated with supplier diversity programs today relate back to data, which correlates to the increased adoption of third-party sources we’re seeing across the market. Investing in your data remains the most important step to baseline, grow and expand your program. Supplier diversity is now a driving force in ESG strategies and outcomes, especially across the supply chain.”
