A Pathway to a Supplier Diversity Program 

The need for cultural progress is a calling of our times. Luxury hospitality can play an important role in this movement. When the pandemic hit the hospitality industry, supplier diversity was not at the top of the priority list, as so many resorts and luxury hotels shuttered their doors. But as we open those doors, we are opening them to a new reality. The world looks different and there are new priorities to attend to; labor is scarce, the supply chain is hamstrung, and the world is looking at small and mid-size businesses to see where they stand on addressing the disparities of our modern age. Businesses of all shapes and sizes are thinking about diversity and inclusion. Some are even taking this thinking one step further looking outward at those suppliers with whom they do business. With the new year ahead, it could be the perfect time to approach your procurement in a new way and encourage D&I throughout every area of your operation. 

A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Common classifications are minority-owned enterprises (MBEs), and women-owned enterprises (WBEs). By partnering with diverse suppliers, you can discover new vendors and extend your D&I program. Partnering with more diverse suppliers fosters collaboration, drives company growth, and has a track record of boosting the bottom line. Not only does a commitment to D&I benefit your guests, but it also improves brand reputation and supports your local community. Additionally, a strong D&I program can attract new employees and help you retain the best and brightest. Employees are attracted to companies that are making a difference in the world and allowing them to focus on efforts like this can improve staff retention. 

Here are some steps your operation can take to create a more inclusive and diverse atmosphere and grow your relationships with diverse suppliers: 

Define Your Diversity Goals 

Your D&I program will be unique to your business and your local community. No matter the size of your operation, the first place to start is to create an empowering D&I statement for your operation. This statement must be reflective of the values of the highest-level leaders in the company. How does this statement tie into your core values? Does it send a message to your community that all are welcome at your property? Working proactively to recruit employees from a diverse candidate pool, is there a staff member who might be willing to champion this effort? What is the scope of your new program? 

Once you have addressed these questions, you might be ready to take your D&I efforts to the next level, which is to extend your D&I efforts to expand and rethink your supplier portfolio. 

Identify Diverse Suppliers

There are two types of diversity classifications: self-classification and third-party certification. Third-party certification involves independent verification by recognized agencies. Smaller suppliers may prefer to self-identify since third-party certification can be cost-prohibitive. Depending upon the size of your supplier portfolio it can be challenging to identify whether a supplier is a minority or women-owned business. If you have a manageable portfolio, you can simply ask your suppliers by creating a supplier profile or questionnaire. Larger corporations with hundreds of suppliers will often access software such as CVM by supplier.io to scrub their list of vendors against a large database of third-party certified suppliers. 

Embrace Procurement Technology

Embracing procurement technology to assist with your supplier diversity efforts is key to making a true impact. By integrating procurement technology into your sourcing process, you can expand your pool of potential suppliers. Procurement technology opens a whole new world of diverse e-commerce partnerships and can help your business identify high-quality products to source from more diverse brands. Once you integrate procurement technology with your new suppliers, you gain access to more diverse supplier data. Your new suppliers get a deeper dive into who is buying their products, how much they are buying, and which products are big revenue drivers. 

If you are aligned to a GPO or purchasing technology partner, you might ask them to assist you in identifying, or even tracking, your diverse spend. At Source1, a leading procurement technology platform for the hospitality industry, we have over 350 food and non-food suppliers. We have partnered with Entegra Solutions to identify which of these are minority-owned suppliers. Source1 also is intentional in its choice of food manufacturers such as General Mills, Unilever, and PepsiCo, ensuring they share common values and have strong ESG (Environmental, Social & Governance) programs. When your hotel joins as a Source1 member, you gain access to an alliance of suppliers, both diverse and otherwise, who understand the importance of this common goal. 

Track Diverse Spend

As Peter Drucker, a preeminent thinker in modern business, said “you can only manage what you can measure”. Once you have identified your diverse suppliers, the next step is to find a way to track diverse spend. Ask your accountant or bookkeeper if there is a field within your accounting software where this can be flagged. Even with small-business accounting packages they usually have flexible fields by which you can identify diverse suppliers and run reports by this grouping to see if your spend has increased over time. 

Launching a diversity and inclusion program doesn’t have to be hard when you are committed to growing your supplier networks. Defining your program, creating new partnerships, aligning with like-minded businesses, and embracing the power of technology are great steps to creating or improving your diverse and inclusive supplier relationships. Not only does joining forces with diverse and inclusive organizations improve your brand reputation, but it also lets your community know that your company is committed to diversity and inclusion, which can lead to future partnerships. 

For more information, please visit https://www.source1purchasing.com