Maintaining supplier diversity has become a corporate imperative today as businesses look to support and grow a mutually beneficial, multi-cultural world. Marketers play an important role in this process, with opportunities to expand the utilization of diverse suppliers to create a greater competitive advantage and efficiency. Having the right technology in place can be the catalyst.
Think of supplier diversity in terms of corporate culture, social responsibility, or diversity and inclusion. There are 11 million minority-owned, veteran-owned or SBA-defined companies today, generating almost $2 trillion in annual revenue and employing more than six million people worldwide. This provides ample opportunity to source from multiple channels in support of diversity, however, companies must first ensure they’re adding value to the supply chain.
Many organizations, such as the pharmaceutical or healthcare industries, are required by the government to have goals in place and report on their supplier diversity numbers, while others have made it a priority, simply because it’s the right thing to do. It makes sense to have a supply chain that represents their members and customers. There is also the notion of measuring business performance by societal impact, which can directly correlate to supporting underserved communities. In addition, the employees working for these diverse suppliers are spending money and giving back to their communities, which in turn helps drive the greater ecosystem.
Marketing departments and marketers make up anywhere from 7-10% of a company’s spend, while the typical net return from the marketing department efforts should be 25-30% of the organization’s overall revenue. This means the marketing departments supplier diversity goals need to factor into the overall businesses.’ The vendors and other suppliers they bring on board to help with their efforts must also support diversity. Net-net: there should be a diverse set of suppliers on every RFP.
Often, this is easier said than done. The right level of information on the different classifications of suppliers isn’t easy to come by. Visibility into company composition, structure, goals, or reporting is nearly impossible without the right technologies in place. These solutions must be designed to cull key insights and make them readily available to marketers to assist with decision-making.
The good news is that platforms like Noosh can help companies identify and accurately evaluate the capabilities of qualified minority-owned businesses as they source marketing campaigns. With data about suppliers, their specialty, and historical performance, marketers can make informed decisions about which vendors they award contracts to. This helps marketers be confident in their choices to select from a diverse set of vendors and makes it easier to support corporate supplier diversity imperatives. The system also simplifies the collection of data and evidence they are meeting requirements, to report back – for regulatory and other reasons.
“At a time when stabilizing the supply chain has become a top concern, priority, and regulatory imperative for much of corporate America, the ability for marketers to identify and source the right suppliers in support of company directives has not been easy. Most of the information made broadly available is stale and unreliable. Only with the right solutions in place, can we glean the detailed, current insights needed on each supplier to determine how to organize our marketing support mix. Luckily, there are new solutions available that are helping us do just that” – Dana Small, senior category manager, head of commercial, global strategic sourcing at BioMarin Pharmaceuticals.
A recent report from the Association of National Advertisers indicates that 75% of its members have at least some form of formalized supplier diversity program and that 40% explicitly impacts the supply of marketing and/or advertising products or services. That’s a significant and growing number.
With a targeted strategy in place and access to the right level of information, marketers can help to ensure the inclusion of diverse marketing businesses in the supply chain. They can understand their performance in a much more efficient way, develop objectives more holistically, and manage their marketing programs better overall.