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What is supplier diversity ?

Supplier diversity refers to the use of minority-owned businesses as suppliers, and a supplier diversity program is a proactive business program which encourages such use within an organisation's supply chain. Supplier diversity helps in creating opportunities for minority suppliers so that everyone has access to the same opportunities. Supplier diversity is a strategy that seeks out and welcomes diverse suppliers regardless of their ethnicity gender or socioeconomic status.  Diverse suppliers are defined as businesses 51% owned by a minority woman, caste, LGBTIQ+, veterans, People with Disability or historically underutilized populations.

Business organizations benefit by gaining access to innovative fresh ideas and extraordinary capabilities. This may all translate into additional competitive advantages, increased value to supply chain and stake holders.


Supplier diversity is an intentional strategy that drives change and encourages the inclusion of often overlooked suppliers with exceptional capabilities. Secondly, it is a low-risk cost-effective discovery process for ideas concepts and insights that may never be encountered otherwise. Some of the Supplier Diversity Use Cases are as follows:


Use case 1: Consider you are a health care corporation wanting to expand your consumer base by marketing to a new diverse consumer. Your insights team has determined it an untapped market to help create a multicultural strategy to engage this new consumer. Your procurement team aids with finding multicultural agencies not only diversely owned but specialized in knowing how to engage consumers. In identifying a diverse agency you are now able to enhance this new customer’s experience and as a result achieve record-breaking customer satisfaction, loyalty and differentiate yourself from competitors.

Use case 2: Through their supplier diversity program, a multinational FMCG Company actively sought out suppliers from diverse backgrounds, including minority-owned, women-owned, and small businesses, within their supply chain. The company experienced a dip in supply for one of the ingredients as the Petrochemical industry started using that ingredient for horizontal drilling operations. Demand outpaced supply, availability became an issue and the cost increased by 700% making it difficult to get that ingredient. One of the new diverse suppliers took the initiative of leveraging their global minority chamber connects and helped the company find an ingredient which was a one to one replacement for the current one in terms of functionality, the cost differential being only 5% from the current material. The company switched the ingredient in their food, changed the labelling and continued production.

Supplier diversity is a business process and strategy sustained by vendor diversification, feeding a pipeline of ingenuity, empowering all communities to thrive.

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