#Supplier Diversity: Questions when making it happen in Europe

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Supplier Diversity statements are found on a many multinational company's public facing Procurement page. Most commonly that company is headquartered in the US, or at least has significant US operations where supplier diversity is mandated and maybe they have translated the introduction about supplier diversity to make it accessible to markets less familiar with the terms.

Now take a Procurement Manager in Europe who is asked to drive supplier diversity in the region. Assuming this is someone new to the topic immediate questions may be:

  • What is a "diverse" supplier in Europe? Does that differ by country?
  • Why should we do this? Why are others not doing it?
  • How do we define and measure targets for a supplier diversity program?
  • Isn't this favouritism/tokenism/against competitive bidding...? 
  • Where do I find those suppliers? How can I ensure they fit the classification we eventually come up with?
  • Are these suppliers ready to do business with us? Do they have the right size? Are they financially stable? Do they have experience dealing with large clients and do they know what we expect?
  • Can they respond to a full RFP process? Will they pitch professionally in front of my internal stakeholders?
  • Can we integrate these suppliers in the 2nd tier - working under the umbrella of one of our larger suppliers? How do we do that and how can we incentivize our suppliers?
  • How do I find time for this if my targets dictate I focus on big deals, big savings, big risks and outcomes?
  • We are trying to consolidate suppliers, isn't this again risking having thousands of suppliers in our database which can't be effectively managed?
  • Can the supplier understand and accept our contract terms? Are they sufficiently insured?

This is not an exhaustive list, but all of those are typical and relevant questions that Procurement teams ask when debating whether to implement a Supplier Diversity program in Europe (or elsewhere).

Often, the result is a half-baked commitment to do something, to appease headquarters or CSR agenda drivers. Procurement Managers have little time or incentive to dedicate to this, whilst if there are dedicated Supplier Diversity representatives, they are often not career Procurement professionals who understand the intricacies of above questions and need Procurement Managers to collaborate with them to make the program happen.

The result are commitments which are difficult to implement and lukewarm participation in some Supplier Diversity forums and events.

We will be covering the topic in more depth and are of course more than interested to hear (and portray) success stories for supplier diversity programs outside the US.

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