Over the last few years, COVID-19 and the social justice movement have been stark reminders about the importance of diversity, equality and inclusion (DE&I) in all aspects of society, and the business world is no exception. Expectations placed on companies by investors and consumers on environmental, social and governance factors, including DE&I, have notably increased.
Investors, customers and employees are also becoming more aware of companies’ social responsibilities. They expect that businesses generate positive impacts in relation to DE&I through their policies, processes and behaviors, both within the organization and throughout their supply chains.
What is DE&I in business?
Diversity, Equity, and Inclusion, or DE&I as it is commonly referred to, is a term that broadly outlines the efforts an institution takes to create a more welcoming environment for people or companies that are less privileged.
The Independent Sector defines it in the following way:
Diversity includes all the ways in which people differ, encompassing the different characteristics that make one individual or group different from another. While diversity is often used in reference to race, ethnicity, and gender, it encompasses a broader definition of diversity that also includes age, national origin, religion, disability, sexual orientation, socioeconomic status, education, marital status, language, and physical appearance.
Equality is the fair treatment, access, opportunity, and advancement for all people, while at the same time striving to identify and eliminate barriers that have prevented the full participation of some groups. Improving equality involves increasing justice and fairness within the procedures and processes of institutions or systems, as well as in their distribution of resources. Tackling equality issues requires an understanding of the root causes of outcome disparities within our society.
Inclusion is the act of creating environments in which any individual or group can be and feel welcomed, respected, supported, and valued to fully participate. An inclusive and welcoming climate embraces differences and offers respect in words and actions for all people.
As the population becomes more diverse, companies that don’t invest in DE&I in their workforce and supplier base can find themselves getting left behind. Businesses that prioritize DE&I, however, are well-positioned to have a greater positive impact on their employees, customers, suppliers and the communities where they live and work.
Here are three benefits of diversity, inclusion and equality in your supply chain:
Casting a wider net enables you to build a supplier portfolio that includes a broader range of supplier segments. This ultimately allows you to increase spend with diverse suppliers, drive higher procurement cost savings and optimize overall supply chain value.
It’s not new news that corporations can become stagnant, running out of new ideas, techniques, or sources. If the same employees and departments are continuously being tapped into, creativity can become non-existent. Inclusion can be the solution to this problem. Including diverse employees in processes and decisions brings with it new information, ways of thinking, and skills – ultimately broadening your talent pool. That pesky problem that’s been bugging you for months has now been solved thanks to under-utilized diverse employees and their amazing ideas.
Understanding Your Customer Base
If you have a diverse customer base, it would be beneficial to employ one as well. In doing so, organizations can mirror their customers and gain insights into their beliefs, preferences, and thought processes. Many companies hire employees from different backgrounds because they personally represent the tastes, sensibilities, and interests of a broad range of customer divisions. Overall, one would get a much clearer understanding of the individuals who buy company products or seek out their services and may adapt their supply chain to reflect this new understanding.
Inclusion and diversity are integral components of any healthy organization. They bring beneficial change and a greater understanding of cultures. As you contemplate your corporate procurement strategy, be mindful of the value that supply chain diversity could deliver to your organization.
Here at Venture Connections we strive to implement diversity, equality and inclusion while building our supplier and buyer network. If you would like to become a part of the network click here.