Published On: Sat, Sep 29th, 2018

Why Having A Diverse Supplier List Should Be Your Business Priority

Why Having A Diverse Supplier List Should Be Your Business Priority

Seal the deal on supply chain benefits. Image licensed under Creative Commons.

It’s an open secret in procurement circles – having a broad and varied supplier list is a great strategy that can pay dividends for the success of your business. Some of the largest blue-chip companies have come around to this way of thinking in recent years, proactively seeking out suppliers that engage with blossoming diversity policies that they hold – from those owned by minorities such as people of colour, to companies supporting LGBTQ+ rights or even just ensuring that small businesses or suppliers within their local area get in on the chain.

 

What Is The Benefit To You?

This approach has far-reaching advantages, managing to be both altruistic and smart business practice. For as well as benefiting the community in the local economic ecosystem that your company is a part of, encouraging a diverse supplier base also gives you a distinct competitive advantage. Reports looking into the subject have found return on investment can be up to a staggering 133% higher than in companies who do not work to broaden their roster of suppliers. The same report also found that those companies with a diverse supplier list had overall operating costs that were lower than those who did not, and spent an average of 20% less on their procurement – so the business case is there to make a switch.  And if you need any more convincing, there are a host of other reasons to aim for diversity in your supplier base.

 


Innovation First

Innovation is what your business needs to drive it forward and separate it from the competition- in fact, you could say it’s the holy grail for any successful operation. And reaching out into new markets encourages this creative alchemy. Working with newer SMEs as opposed to large established operations often means that you end up doing things differently, which can give you the edge. They also have agility to respond quicker to market demands due to their size. As a buyer, this can have a huge impact on your business as this innovation has a halo effect. Working with local suppliers also gives your outfit a much deeper understanding of conditions within the area, which can also contribute to creative development. Whether it’s buying in your marketing collateral from a local graphic design agency, or procuring quality legal services from Robinette Law, you will get the benefit.

 

The Power To Drive Down Costs

Keeping a larger range of suppliers ensures that you have a valuable asset – bargaining power. Multiple purchasing avenues guarantee more of an insight into market conditions and pricing factors, and this knowledge will allow you to bargain more effectively and negotiate with suppliers for a better price. You can leverage your position to analyse the range of goods out there, the cost and the opportunity. It’s the perfect position from which to drive real results. If you choose to work with local small businesses, you are also giving back in your economic ecosystem, which has benefits both direct and indirect for your company and workforce by directing cashflow back into the area where you live and work – a harmonious state of affairs which can have a truly great effect. Using your purchasing power to benefit your company and your home – what could be better?

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