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Supplier Diversity: A Profitable Strategy

10 July 2015


April 29, 2015 marked a very important milestone for mdevents, as it was the day for which we received our woman-owned certification. With that, we wanted to share with you the importance of Supplier Diversity and how it can be a benefit to your organization working with vendors such as mdevents.

What is Supplier Diversity: A Profitable Strategy?

Supplier Diversity is a business strategy that ensures a diverse supplier base in the procurement of goods and services for any business or organization. Supplier Diversity emphasizes the creation of a diverse supply chain that ensures the inclusion of diverse groups in the procurement plans for government, not-for-profits, and private industry. Statistics show that companies who embrace diversity are more profitable than companies who don’t.

“The reason diversity works is that on almost every measure, greater racially, ethnically, and culturally diverse workplace teams function more effectively than more homogenous teams. Members from diverse backgrounds, experiences, and perspectives avoid “groupthink,” whereas non-diverse teams get mired in it. …In short, the business case for diversity is overwhelming.”

What is a Diverse Supplier?

There are approximately sixteen categories used to identify diverse businesses. Common examples include Small Business Enterprise (SBE), Minority owned business enterprise (MBE), and Women Business Enterprise (WBE). In order to report diverse spend; it is important to ensure suppliers are certified.

Why is Supplier Diversity important?

A common misconception is that diversity is a quota system or social program designed to benefit selected groups while adding little to no value to the bottom-line. The fact is that a competitive advantage exists, as progressive organizations who have already implemented an effective strategy have realized. A Supplier Diversity commitment benefits a company because it:

  • Promotes innovation through the entrance of new products, services, and solutions
  • Provides multiple channels from which to procure goods and services
  • Drives competition (on price and service levels) between the company’s existing and potential vendors
  • Allows a company to take advantage of new opportunities for business expansion with the emergence of new consumer needs based upon shifting demographic realities
  • Displays an organization’s commitment to doing business, beyond consumerism, in diverse markets
  • Showcases the company’s interest in and commitment to the economic growth of all communities


Supplier diversity is beneficial to all stakeholders, not just to the companies with programs. First and foremost, supplier diversity programming adds economic value because it encourages the growth of diverse businesses. Diverse businesses typically encounter barriers that challenge their start-up and sustainability, so effective supplier diversity strategies can alleviate these pain points.

As small businesses grow, so will our nation’s economy. Since most diverse businesses are small businesses, they aid in the economic recovery and sustainability of their communities. In addition, supplier diversity is important because it provides products and services to emerging consumer markets. While traditional products and services remain available to consumers, demographic shifts create opportunities for diverse suppliers to meet the needs of emerging and/or shifting populations in the U.S. and across the globe.

Supplier diversity is also important because it assists the country in job creation. U.S. statistics show that nearly 50% of the U.S. workforce is employed by small business. In December 2014, the U.S. Small Business Administration reported 57 consecutive months of new jobs added back to the U.S. workforce after the worst recession in recent U.S. history. SBA Administrator, Maria Contreras-Sweet reports “…this new trajectory is attributable to the success of America’s entrepreneurs and the resurgence of our nation’s small businesses. About 7 million of the 10.9 million jobs added back were created not by large corporation, but by startups and small enterprises.”

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