Organizations have long attempted to improve supplier diversity in procurement. But with the socioeconomic impact of the pandemic and the renewed urgency around racial justice, companies now see an opportunity to double down on their supplier diversity commitments to build a more inclusive, more resilient economy.
To produce real change, companies understand that they must do more, starting with rethinking their approach to supplier diversity. Companies can begin by identifying minority- and women-owned businesses capable of growing into top-tier suppliers, and learning how they can best partner with and enable these suppliers, removing barriers and creating new access to opportunities. Where those businesses don’t already exist, companies can actively help create them—by funding startups and entering into joint ventures and other partnerships.
BCG partners with companies, nonprofits, and civic organizations to build inclusive sourcing strategies for advancing racial equity and business goals alike.
When guiding organizations through such changes, BCG supplier diversity consultants can draw upon the firm’s deep experience in procurement; diversity, equity, and inclusion; and total societal impact. We leverage the expertise of James H. Lowry & Associates, founded by BCG senior advisor Jim Lowry, to understand the minority business landscape and identify suppliers that companies can look to in order to quickly diversify their spending. In some instances, an organization may determine that the best way forward is to invest in or partner with diverse suppliers to help them grow—or even help launch a new business. In such cases, BCG’s supplier diversity consulting team can work hand in hand with the firm’s joint ventures and mergers and acquisitions consultants.
BCG has partnered with several leading organizations in the business community to build more inclusive vendor programs, including the Office of the Mayor of Los Angeles, the Civic Committee of the Commercial Club of Chicago, the Business Roundtable on Racial Equity and Justice, CEO Action for Racial Equity, and a number of leading companies.
Whether standing up a supplier diversity program or transforming an existing one, BCG can develop a comprehensive strategy to cover each component of the program in detail:
Vision. Building the vision and ambition for the program, benchmarked against leading peers.
Roadmap. Determining milestones in the near-, mid-, and long-term to achieve the vision, along with detailed execution plans to implement the entire program and key initiatives.
Governance. Providing clear decision-making rights, roles, and responsibilities between the supplier diversity team, business stakeholders, and procurement; developing processes for the team to operate efficiently, such as annual planning.
Engagement Models. Creating service models with varying levels of support that will align the supplier diversity team’s resources to maximize impact; the team can use these models to prioritize their capacity and standardize their playbook offerings.
Playbook Offerings. Determining the set of levers the team can use to grow their organization’s spending on diverse suppliers, along with the set of activities the team will offer and detailed tactical instructions to execute against.
Diverse Supplier Experience. Ensuring diverse suppliers are supported throughout their lifecycle once they are onboarded (minimizing barriers, tracking their performance, helping them grow within the organization) and developing ways to cultivate the next generation of suppliers through trainings, mentorship programs, and incubators.
Tracking and Reporting. Building advanced metrics and reporting dashboards that will go beyond spending to measure impact against key areas: traction of the program, growth of spending and of supplier capabilities, and community impact.
Communications and PR. Developing a communications plan and scripts to announce changes and galvanize the organization, along with roadshow materials for the supplier diversity team to secure buy-in from key business stakeholders.
What does a next-generation supplier diversity program look like? BCG partnered with the Civic Committee of the Commercial Club of Chicago to assess the current minority business landscape and how supplier diversity programs could drive impact.
The BCG playbook for leveling up supplier diversity programs is a repository of ideas and actions that companies can implement to accelerate supplier diversity in procurement. The playbook offers best practices and tangible examples from successful corporate supplier diversity programs, including:
BCG is making many of the same innovative changes to our minority- and women-owned business enterprise supplier policy while also measuring the diversity of our vendors. Our success hinges on our ability to elevate diversity of thought and experience, challenge established mindsets, and unlock solutions that enable organizations to thrive.
BCG's diversity, equity, and inclusion report highlights our U.S. diversity data and offers a snapshot of the progress we've made as our DEI efforts continue.
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