No company is an island. The business environment in which your company operates goes beyond your employee base and pipeline. Examining supply chains and applying DEI goals to your supplier network can be a powerful approach to advancing your company’s touchpoints with BIPOC individuals and business owners.
It’s important to understand the landscape of business ownership and how that impacts supply chains ecosystems.
Procurement processes often result in working with bigger, more well-established firms at the expense of diverse, local suppliers. According to the Council for Supplier Diversity, 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. Partly because of a multitude of barriers to entry (access to capital, historical inequities, etc.), BIPOC and women-owned businesses are significantly more likely to fall in the small business category. Some 98% of Black-owned businesses and 96% of Latinx owned-businesses are microbusinesses ( less than 5 employees). For this reason, partnering with capacity building, training and mentorship programs, especially at the state/local level, is an essential strategy for diversifying supply chains.
- The U.S. Small Business Administration estimates there were 112,000 companies owned by BIPOC, women, LGBTQ+ and other diverse groups in Colorado as of 2019 (report, < 10 minutes).
- Microbusinesses represent 92% of all businesses, and are significantly more likely to be owned by BIPOC and women, according to the Association for Enterprise Opportunity (report, 10-60 minutes).
- Large companies are making and publishing their commitments to move investments (like Netflix) and shelf-space (like Sephora and Yelp) to Black-owned businesses.
- Large companies, including AT&T, CaptialOne and JPMorgan Chase are making DEI pledges across a variety of industries to recommit to the utilization and growth of minority businesses.
- Google’s supplier diversity program has helped small and minority-owned businesses win contracts for a wide variety of commodity products and for services like transportation and catering.