Supplier diversity is still a key component in the supply chain even in today's economic climate

Today, Supplier.io released its 2023 State of Supplier Diversity report, revealing that businesses continue to prioritize supplier diversity as a key component in their supply chain strategy, despite the current economic landscape. The report showcased that:

• 69% of businesses reported the economic climate has had little to no effect on their supplier diversity initiatives.
• 89% anticipate consistent or increased business support for these programs in the following year.

A significant 66% of participants pointed to supply chain competitiveness, encompassing elements like cost savings, risk mitigation, and innovation, as the main motivator behind their supplier diversity efforts. Notably, the research underscored a decline in the number of organizations adopting supplier diversity solely due to corporate mandates or societal expectations. Over the last six years, implementing these programs due to customer needs and government regulations decreased by 33% and 27%, respectively.

Aylin Basom, the CEO of Supplier.io , commented, "Supplier diversity isn't merely a box-ticking exercise. It's an active and vital supply chain approach, as proven by the expanding investments in diverse enterprises, be it SMBs, veteran- or women-led businesses, or minority-run entities. These initiatives have seen substantial evolution, enhancing their global economic impact."

Key insights from the report are:

• Most companies will actively promote their supplier diversity initiatives, irrespective of political influences. Only 7% plan to reduce publicizing their efforts, while 38% will maintain their current promotional levels, and 16% will boost their publicity.
• 2023 witnessed a surge in executive backing and clearer program objectives. A staggering 97% noted unwavering or enhanced executive support from the previous year. Now, 72% of companies have lucid supplier diversity targets, a growth from 68% in 2022. Additionally, 48% have incorporated supplier diversity indicators into managerial KPIs.
• Beyond supply chain competitiveness, businesses also harness supplier diversity to bolster brand reputation (53%), secure new contracts (46%), and to complement their organizational culture and inclusiveness efforts (81%).
• 55% of businesses find supplier diversity instrumental in driving their holistic ESG strategies.
• The backbone of supplier diversity remains data. There's been a 44% uptick since 2022 in businesses (67% in 2023) leveraging third-party data services to refine their initiatives. Additionally, 56% believe that the diversity-related data they have is superior to previous years.

Basom further added, "Data is integral to the evolution and efficacy of supplier diversity initiatives. Our findings highlight that data-related challenges dominate the concerns of businesses in this domain, which aligns with the rising adoption of external data providers. Investing in quality data is crucial to set, nurture, and augment supplier diversity, especially as it becomes pivotal in ESG agendas across supply chains."