Leadership Lesson: The Value of Vendor Diversity

Astute marketers realize the value of a diverse clientele, and businesses recognize the importance of engaging a wide pool of suppliers. In fact, tapping vendors that represent historically underserved or disadvantaged populations can offer numerous benefits.

For decades, The Coca-Cola Company has incorporated supplier diversity into its business protocols, enabling The Company to establish best practices that proactively explore, review and promote a robust variety of vendors. These include women, veterans, the LGBT community, and other minorities. Lessons from                       The Coca-Cola Company's experience may be helpful to customers striving to build similar programs.

“The Company seeks to provide all suppliers access to opportunities of doing business with us and reflect the businesses we serve,” explains Terrez Thompson, vice president, Global Supplier Diversity, The Coca-Cola Company. “Some people view supplier diversity as only a social responsibility, but it’s actually a business imperative.”

This initiative impacts the bottom line because:

• Many operators contractually require companies they engage with to have diverse suppliers and spending
• Multiculturals are emerging as a dominant consumer segment – comprising 80% of total population growth through 2020¹
• Women continue to be a key category for making buying choices

Thompson says a supplier diversity team serves as internal advocates for minority businesses, helping decision-makers understand their importance. A program should focus on building rigor and integrating various vendors into existing procedures, so employees don’t see this as extra work, but as a natural extension of their job.

Embracing Multiplicity                                                                         

Because of its extensive experience, The Coca-Cola Company helps customers develop supplier diversity capabilities for their organizations. Following are eight recommendations:

1. Obtain commitment from the top, making it a priority
2. Put resources in place to ensure a sustainable initiative
3. Tap seasoned professionals to execute the program
4. Establish ties with the internal supply chain from which most purchasing decisions happen
5. Institute procedures and processes
6. Research and adopt industry high-performing practices
7. Measure performance and link to rewards
8. Identify qualified and capable candidates who are competitive

“Being competitive isn’t solely about cost,” cautions Thompson. “It also encompasses value, and many smaller vendors are nimble, innovative and creative. The Coca-Cola Company works with smaller suppliers to help develop their proficiencies so they can compete on a long-term basis.”

While implementing an effective supplier diversity program takes planning, support and resources, investing in expanding opportunities for others can produce rich returns.

To learn more about building a supplier diversity capability for your business, check out Supplier Diversity on The Company’s website.

Source: The Coca-Cola Company proprietary research