Skip to main content

When looking to integrate D&I, focus on supply chain

By Royal Bank of Canada

Published June 13, 2024 • 5 Min Read

While D&I can be threaded through all areas of business, we present an area to focus on: the supply chain.

Companies seeking to incorporate diversity and inclusion (D&I) should look to impart meaningful outcomes.

Michelle Needles is an Executive Vice President of Occupier Services at Colliers – a multinational real estate services and investment management company – and has led D&I efforts with clients that seek to implement change in this space. She says that intention without action is harmful, as intention alone doesn’t create opportunities for the communities it is intended to uplift.

A diverse supply chain can broaden any company’s impact on D&I while supporting underrepresented entrepreneurs. The key is to build contractual relationships with suppliers that are at least 51 per cent owned, operated and controlled by those from underrepresented groups – with the goal to build lasting alliances.

It also supports the bottom line. In fact, studies have shown that minority- and women-owned suppliers save corporations 8.5% in annual costs.

“Regardless of the business, diversity among employees and collaborators brings about new ways of thinking, new perspectives, different approaches to problem solving, and new levels of innovation,” Michelle says.

On building a D&I-focused supply chain

Like any business strategy, it can be hard to know what to prioritize at the outset. One early move would be to build a supplier code of conduct that articulates D&I values, communicates expectations, and serves as the foundation for relationships.

Michelle suggests beginning by determining what D&I data points a company has that relate to workforce and spend, and use them to set benchmarks. This process can spread awareness of the goals – and help ensure there is a throughline to those teams who have responsibility for decisions that impact those metrics (typically human resources, procurement, and relevant business lines).

“Establishing metrics at the outset is important to understanding where the program is starting, how it is growing, and what adjustments need to be made to advance and adapt as progress is achieved,” Michelle says.

How to find diverse suppliers? While self-certification is growing in recognition, seeking out certified suppliers is standard practice for government agencies, long considered leaders in this space. Companies may consult members of the Supplier Diversity Alliance Canada or the certifying entities recognized by the U.S. Chamber of Commerce. They may also decide to hire a diverse procurement consultant with knowledge of the local community to identify well-suited subcontractors. They can search for potential subcontractors registered in platforms such as Supplier.io that are designed to connect diverse suppliers to different types of businesses.

Michelle says that one way to cultivate long-lasting relationships with these suppliers is to go beyond the initial spend and support these diverse businesses in additional ways.

“One strategy would be to cultivate their talent where possible – by offering training and mentorship, or reviewing their plans to identify ways they can achieve their own D&I goals,” she says.

To really effect D&I change, companies can look past their primary supplier spend to the spend of others. Working with suppliers that are willing to prioritize inclusiveness in their own supply chains will broaden this effort even further. The deeper that diversity spend can be tracked into the supply chain, the more a company can authentically say it supports local economies and communities.

Cummins is one Colliers client that is committed to advancing D&I and is a member of the Billion Dollar Roundtable (at least $1 billion USD in annual spending with diverse suppliers).

“When we sought a global real estate partner, we challenged companies to come up with creative solutions that would help ensure we can fulfil our mission of finding diverse suppliers,” says Gabrielle Woolley, Cummins Executive Director of Global Real Estate. “Most important is that a strategy would be achievable for the long term as we entered a new region and built a diverse new supply chain there.”

Michelle and Colliers developed business intelligence software so that Cummins could analyze their pipeline of transactions and map locations over the next two years where they could hire diverse brokers. Colliers also helped Cummins build in equitable fee sharing agreements to further boost these underrepresented groups.

“We’ve found that relationships with our suppliers work better when we endeavour to follow this guiding principle of diversity,” Gabrielle says. “Committing in this way to D&I comes down ultimately to a desire to make a meaningful impact, and making sure that’s part of strategy.”

Michelle agrees that the road to demonstrating D&I commitments isn’t only about saving money. “With Cummins, we sought to create a more inclusive partnership, bringing tools they would need to advance their objectives, and using their D&I commitments to spread greater awareness of these issues in our own organization.”

Effective D&I incorporates all areas of the business. Don’t lose focus on the external factors – most notably, the supply chain – to help ensure a fulsome strategy. 

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

Share This Article

Topics:

Supply Chain