Over the last few years, many companies have turned their attention to supplier diversity, an important area of procurement and supply chain management. Working closely with the supply base not only benefits the community around you, but also provides distinct competitive advantages for your business, from faster innovation cycles to cost efficiencies.

If you are wondering how your business can take advantage of procurement’s best kept secret, try the following tips to help get your supplier diversity program successfully off the ground.

Build a Community

Supplier diversity means proactively sourcing products and services from previously under-utilized suppliers. Building a diverse, supportive community is powerful. It creates an accountable environment where everyone is comfortable about sharing, collaborating, working towards the same goals and making things happen.

Select a contact person or a supplier diversity champion who works directly with vendors to understand their individual goals and objectives. She must ensure that the right suppliers are chosen, and engage everyone in the organization in best practices.

Companies like Google, AT&T and Kroger design their supplier diversity programs to reflect broad diversity of the marketplace and connect suppliers to untapped opportunities. Likewise, since different vendors operate in multiple business networks, developing a robust community allows companies to penetrate new market segments and gain new customers.

Foster Strong Supplier Relationship Management

The key to a successful community of suppliers is a solid relationship. You need to have the right type of relationship with suppliers before any collaboration efforts are ramped up.

To do this,  prove you’re a good customer. There are two quick ways to earn respect from suppliers—always pay your bills on time and try to give your vendors as much lead time as possible.

Invest in high-quality supplier relationship management software to help keep track of all vendors. Be honest and open with your suppliers about your needs and expectations. Personalizing the relationship, whether by inviting your suppliers to your strategy meetings or sharing information about new products, will help you create long-lasting partnerships.

Set Standards

An effective supplier diversity program requires careful and strategic planning. What are your business goals and objectives? What can you get out of diversifying your suppliers? Don’t simply accept the answer that it’s good for your business.
Determine the diversity characteristics of your vendors and how much you want to spend on each of them. You need to establish a baseline of where you are, where you have the opportunities to increase diverse spend and where you need to take action. This will make it easier to track and measure supplier performance and help you avoid getting caught in granular, trivial details.