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Diversity in Sourcing

There is a particular emphasis in ethical sourcing around diversity, or the practice of sourcing, qualifying and purchasing from smaller, more economically disadvantaged businesses.  The concept of diversity in procurement includes the support of these groups by giving them equal opportunities to bid and win contracts.  Segments of business that typically require special considerations are those considered at a competitive disadvantage, or a Disadvantaged Business Enterprise (DBE), which is at least 51% owned or controlled by a socially and economically disadvantaged individual.  Specific DBE’s include minority-owned, women-owned, service-disabled, veteran-owned, etc.

Best Practices for a Diversity Initiative

The following actions should be put in place when incorporating diversity and inclusion into the procurement process: 

  • Commitment of senior management and procurement officers regarding diversity
  • Providing internal education on the benefits of diversity sourcing
  • Maintaining a corporate culture which promotes ideas and techniques for diversity
  • Tying diversity sourcing goals to individual performance measures and compensation
  • Establishing annual goals for purchases from diversity suppliers
  • Including minority suppliers in all RFQ’s
  • Including terms in supplier contracts for diversity spend goals and reporting for their supply base

In addition to sourcing from diverse and minority suppliers, other means of support can be provided, such as financial assistance, training and mentoring, and business and technology assistance.

Diversity Goals

Measurable goals for a diversity program are necessary in order to communicate the expectations and measure progress.  Examples of goals include:

  • Annual purchase dollars spent with diverse suppliers
  • Percent of increase over previous year’s purchases
  • Percent of total purchase value spent with diverse suppliers
  • Number of companies in relationships for mentoring, joint venturing, strategic alliances, financial assistance, etc.
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