Supplier diversity and supply chain management: A strategic approach

Although purchasing trends are moving toward consolidation, a strong economic argument can be made for supplier diversity. In fact, most Fortune 500 companies currently employ supplier diversity initiatives. If integrated into the overall corporate strategy, supplier diversity can become a source of competitive advantage for corporations. In order for such integration to successfully occur, however, the initiative must have top management commitment, a supportive culture, and the availability of champions to promote the proposal. Minority suppliers, in turn, need to realize that their failure or success in this highly competitive environment depends on their ability to continually develop overall competences, to be learning organizations, and to become increasingly attuned to and adept at building strategic alliances amongst themselves and with their corporate customers. In these respects, they can make use of intermediary organizations (such as local supplier councils) to improve their competences and competitive edge.