Supplier Diversity Data Management: The Foundation of a Successful Supplier Diversity Program
You know that a diverse supplier base is crucial for the growth of your business. You also know that launching a supplier diversity program is challenging when you don’t have a solid data foundation in place.
Your company probably doesn’t have accurate supplier information, let alone the supplier diversity information necessary to correctly track what you spend with diverse companies. Setting goals for increasing diversity spending becomes near impossible when you have no benchmark to work from.
Finding and onboarding diverse suppliers is a massive undertaking if you don’t have a comprehensive database to source from. Accurately tracking your program’s progress isn’t possible if you aren’t capturing key supplier diversity metrics from the start.
Supplier diversity data management is the key to building a successful supplier diversity program. When accurate data collection is a priority, your organization can source new vendors, track goals, identify opportunities for improvement, and ultimately achieve a diverse supply chain that fuels your company’s success.
With a data-first approach, you can transform your supplier diversity program from a good intention into a strategic advantage for your company.
Establishing the Vision and Goals for Your Supplier Diversity Program
Building a successful supplier diversity program requires solid foundational supplier data and a clear vision for your program’s growth. This vision needs to include measurable goals and KPIs.
Here are some considerations to keep in mind when establishing your goals and KPIs for your supplier diversity program:
- Define what success looks like for your program. Do you want to increase spend with diverse suppliers by 5% year over year? Improve supplier retention rates? Set quantifiable and concrete targets.
- Get buy-in from leadership and key stakeholders. Explain the business case for supplier diversity and how it aligns with company values. Ask for input on goals and ways they can support the program.
- Determine how you’ll track and report on progress. Look at metrics like the number of diverse suppliers included in RFPs and bids, the percentage of spend with diverse suppliers, the number of diverse suppliers you work with, and supplier retention rates. Set up dashboards, reports, and reviews to share updates with stakeholders and make adjustments as needed.
- Map out an onboarding process. How will you find and attract new, diverse suppliers? Work with procurement to streamline the onboarding process. Automate what you can to make the experience easy for suppliers.
- Clean up your data. Enriching your current supplier data can help you find diverse suppliers that you already work with. Data enrichment also helps verify other supplier information like classifications, certifications, and contact info. The more accurate your data, the more effectively you can match diverse suppliers to opportunities.
Getting stakeholder support becomes easier when progress is measurable and goals are clearly defined. By prioritizing an efficient onboarding process and high-quality supplier data, you’ll create the foundation for a best-in-class supplier diversity program. That means growth and success for your diverse suppliers and your company.
Implementing a Supplier Onboarding Process
To build a solid data foundation for your supplier diversity program, you need a streamlined supplier onboarding process. Here are the key steps to implement:
- Create a supplier application that captures critical details about the supplier and their business. Contact information, certifications, products/services, and capabilities should be collected during onboarding. The more data you collect upfront, the better. To make this process as easy as possible for both you and your potential supplier, your company should utilize a self-service supplier registration and onboarding portal.
- Require suppliers to provide supporting documentation to verify certifications and classifications. This ensures you have accurate records of a supplier’s diversity status, small business designations, and more.
- Conduct a risk assessment for each new supplier. Review financials, insurance coverage, quality certifications, safety records, and anything else critical to your supply chain. Identify any red flags early on.
- Meet with suppliers either in-person or via video conference. This is your chance to clarify any details about their application, discuss the supplier’s capabilities and fit, and determine if they meet your sourcing needs.
- Once approved, officially onboard the new supplier by entering their data into your supplier management system. This centralizes all the information gathered during the application and assessment process, enabling easy reporting and monitoring of your diverse supplier base.
By implementing a comprehensive supplier onboarding process, you establish a single source of truth for your supplier diversity program. Accurate and up-to-date data on your diverse suppliers means you can match opportunities, track spend, report metrics, and ultimately achieve your program goals. With the right technology and procedures, you’ll be on your way to data-driven success.
Supplier Diversity Data Management
Successful supplier diversity programs are built on accurate, up-to-date supplier data. Collecting and managing this data should be an ongoing process. Allowing suppliers to update and maintain a supplier profile within your system is the easiest way to ensure your supplier data is always accurate.
Data Accuracy Starts with Supplier Onboarding
When onboarding new diverse suppliers, gather important details about their business, certifications, and ownership via your supplier onboarding portal. Ask suppliers to self-report information like:
- Business name, address, and contact info
- Ownership details, including gender, ethnicity, veteran status, disability status, etc.
- Certifying agency and certification expiration date
- Products, services, and capabilities
- Annual revenue and number of employees
This data should be stored in a supplier profile, which your suppliers can access and update whenever they need to via your supplier portal.
Conduct Regular Data Reviews and Updates
Invite your suppliers to update their profiles regularly. Supplier information changes regularly, so double check:
- Ownership and control of the business haven’t changed hands. If a small, woman-owned business was acquired by a large corporation, its status will change in your system and this can affect future diversity spend.
- Certifications are still valid and up to date. Most third-party diversity certifications require yearly renewals. If your business only accepts third-party diversity certifications, you need to ensure that all diversity certifications are accurate and up-to-date to count towards your diversity spend.
- Revenue, employee numbers, products, and services offered remain the same or have expanded
Report and Analyze Supplier Diversity Program Data
The data you collect is only valuable if you put it to use. Regularly report metrics like:
- Number of diverse suppliers
- Diverse supplier spend and percentage of total spend
- Growth in diverse supplier utilization over time
Analyze the data to identify opportunities to improve your program, such as sourcing products or services from underrepresented groups. Share data and insights with stakeholders to demonstrate the impact and value of your supplier diversity initiatives.
Managing high-quality supplier diversity data is essential. By collecting detailed information, conducting ongoing data updates, and reporting metrics and insights, you build a foundation for a strong supplier diversity program.
Accurate data leads to better decision-making, goal-setting, and program growth.
Using Data to Drive Continuous Improvement
Once you have a solid foundation of supplier data in place, it’s time to put that data to work. Using data analytics, you can gain valuable insights into your supplier diversity program and make continuous improvements.
Review Spend Reports
Dig into your spend reports to see how much you’re truly spending with diverse suppliers. Look for opportunities to increase spend in certain categories or with underutilized groups. Set specific percentage targets and put plans in place to achieve them.
Identify Top Performers
Use your supplier scorecards and ratings to determine your top-performing diverse suppliers. These suppliers may be good candidates for expanded business opportunities or mentorship programs with smaller diverse suppliers. Reward them for their excellent work to keep them engaged in your program.
Address Poor Performers
Your data can also reveal suppliers that are underperforming or not meeting your standards. Work with these suppliers to determine the issues and find solutions to improve. Provide resources and guidance to help build their capacity.
Refine Your Program
Look for patterns in your data that indicate certain aspects of your program could use refinement or improvement. You may find opportunities to enhance your supplier certification process, strengthen matchmaking events, expand education and training, or make your portal more user-friendly. Seek feedback from suppliers and internal stakeholders as well.
Continuously monitoring and analyzing your supplier diversity data will help ensure your program remains robust, impactful, and achievable. While using a data-driven approach requires more effort upfront, it is the key to long-term success. With the right data and tools in place, you can build a best-in-class program that drives real results.
Tips on Creating an Impactful Supplier Diversity Program
Start with the Data
To build an impactful supplier diversity program, you need to begin with solid supplier diversity data. Collect information from potential diverse suppliers through a supplier registration and pre-qualification process. Have them provide details on their certifications, capabilities, and capacity.
Streamline the Onboarding Process
Make it easy for diverse suppliers to do business with you by simplifying your onboarding process. An automated system where suppliers can enter information one time cuts down on duplicate data entry and frustration. Suppliers will appreciate how user-friendly and efficient your program is.
Promote Your Program
Spread the word about your supplier diversity program to attract qualified, certified diverse suppliers. Post on your company website, share on social media and promote at diverse business events. Let suppliers know you value building mutually beneficial, long-term relationships.
Provide Resources and Support
Offer resources and support to help diverse suppliers strengthen their businesses. This could include networking events, matchmaking opportunities, mentoring programs, and educational resources on topics like accessing capital, developing strategic plans, and improving operations. Your support and guidance can help diverse suppliers achieve stability and growth.
Measure and Report on Economic Impact
Track how much you spend with diverse suppliers, and measure how your spending impacts the surrounding community. Report these metrics to demonstrate the success of your program to stakeholders and the public. Make data-driven decisions on how to improve and expand your program over time based on the results.
Creating a truly impactful supplier diversity program requires work, but by starting with data, streamlining processes, promoting your program, offering resources, and measuring results, you can build a program that benefits both your company and diverse suppliers. Supplier diversity enriches supply chains, spurs innovation, and strengthens economic growth.
By focusing on the fundamentals of supplier diversity data management, you can build a solid foundation for your supplier diversity program. Streamlining the supplier onboarding process ensures you have accurate and complete data on your diverse suppliers and the ability to report engagement and spend accurately.
Now you can start reaping the benefits of a data-driven program. Armed with insights into your program’s performance, you can demonstrate the impact and value of the supplier diversity program to stakeholders, your customers, and your community.
When you’re ready to enable a data-driven supplier diversity program, get in touch and one of our experts will show you how.