A company's effort to incorporate various groups of suppliers in its active base of supply chain and the sourcing process, as well as addressing all the challenges and opportunities that may emerge from the differences and similarities, can comprehensively be termed as the supplier diversity. Ideally, supplier diversity is a broad business term that is adequately defined as a strategy that effectively enhances a different base of suppliers within the department dealing with the procurement of products and services in any given organization (Kilkenny, 36). Supplier diversity, therefore, enormously puts a large amount of emphasis on the generation of a diverse supply chain whose primary aim is to secure the addition of various distinct groups within the procurement plans for different businesses such as the private industry, government as well as the non-profit organizations (Kilkenny, 36). Moreover, the supplier diversity initiatives considerably assist the organizations to source their products and services from the merchants ran and possessed by economically disadvantaged individuals. Significant corporations like Johnson & Johnson and Walmart have their supplier diversity objectives for their procurement-related efforts (Kilkenny, 36). In general, supplier diversity is the supply chain that completely integrates businesses operated by diverse groups of people.
What are the benefits of supplier diversity?'
Several benefits can be outlined as to why numerous businesses have embraced and made all-inclusive supply chains a priority. Firstly, supplier diversity results in economic value primarily because it enhances the growth of different companies (Porter 27). Many businesses often encounter challenges in their operations and sustainability efforts like minimal networking opportunities, but through substantial supplier diversity strategies al these problems can effectively be alleviated (Porter 28). Notably, a diverse base of suppliers can effectively lead to significant financial benefits for the purchasers. Working along with sellers from different demographic and ethnic groups also offers a valuable opportunity to vend goods to their consumers (Porter 29). Furthermore, from the vendor perspective, fortifying a new contract leads to economic gains and profits while being socially beneficial.
What are the challenges to adopting supplier diversity in organizations?
The supplier diversity industry is associated with various significant challenges that minimize adoption rates for procurement organizations. One specific problem is the reducing costs versus promoting diversity option whereby most of the government contracts not based on diversity may require the organizations to settle for the lowest bid over diverse businesses (Porter 30). Reaching out to smaller suppliers is also an immense challenge since many companies prefer more established suppliers that are cost-effective and safe to transact with (Porter 33). Inadequate support from the top can also affect supplier diversity since, for a successful supplier initiative, there must be backing from the management.
Kilkenny, Salome. "Supplier Diversity." Network Journal 27.1 (2019): 36-36. https://search.proquest.com/openview/0dfb4f33bc3d3420b30e1eadb2a15f98/1?pq-origsite=gscholar&cbl=43721. Accessed 3 February 2020
Porter, Kathey K. "Impact of Supplier Diversity on Startup Activity and Small Business Growth." Implementing Supplier Diversity. Palgrave Macmillan, Cham, 2019. 27-33. https://link.springer.com/chapter/10.1007/978-3-319-94394-7_3. Accessed 3 February 2020
Cite this page
Essay Example on Maximizing Supplier Diversity to Enhance Procurement Strategies. (2023, Mar 28). Retrieved from https://proessays.net/essays/essay-example-on-maximizing-supplier-diversity-to-enhance-procurement-strategies
If you are the original author of this essay and no longer wish to have it published on the ProEssays website, please click below to request its removal:
- Case Study Example: Considerations for Sportsman Shoes Human Resource Management Practices
- Evaluation Essay on Hewlett-Packard (HP) Inc
- Developing a Marketing Plan at BizOps Enterprises Paper Example
- Corporate Social Responsibility Essay Example
- Employee Turnover: A Threat to Organizational Performance - Research Paper
- Essay on Strategic Audit: Progress From Specialized Perception to Overall Organization
- Essay Sample on Team's Competitive Edge: Product/Service Diff. Strategy