The Commission for Racial Equality

WHAT IS SUPPLIER DIVERSITY?

Some types of businesses find it difficult to become contractors for large
organisations, and tend to be under-represented as suppliers, locally, regionally or nationally. Supplier diversity programmes are intended to change this. This does not mean discriminating positively in favour of certain types of businesses (which is illegal); rather, the aim is to ‘level the playing field’, so that all suppliers compete for contracts on equal terms.

The guide focuses on businesses owned by people from ethnic minorities, most of which are small firms, but the advice may also apply to supplier diversity programmes aimed at other minority groups, such as businesses owned by women.

Who organisations buy their goods and services from can make a difference. It can affect the price and the quality of their products and services, their efficiency, and their reputation and performance as an organisation.

The guide explains how large organisations can make sure they are taking full advantage of the diversity of suppliers of goods and services. A comparison of their current suppliers with all the suppliers they could use can quickly show if some types of business are under-represented.

WHAT ARE THE BENEFITS OF A SUPPLIER DIVERSITY PROGRAMME?

■ It encourages competition by allowing more suppliers to compete for contracts. Organisations have greater choice and can select contractors who offer the right mix of well-priced services, flexibility, innovative products and quality.

■ Using diverse suppliers will help organisations to understand their ethnic minority customers better, and open the door to previously inaccessible, but increasingly important and lucrative, markets.

■ It will put an organisation in a better position to win large public sector contracts. Public authorities have a duty to promote race equality under the Race Relations Act 1976, and will look to make sure that the organisations they buy from also meet the requirements under the duty. Any private or voluntary organisation which is tendering for a public contract, and which has a supplier diversity programme, will have a competitive edge.

■ It can help an organisation meet its corporate social responsibilities.

■ It encourages local economic development. EMBs are a key part of local economies and a strong local economy creates greater opportunities to supply goods and services by boosting local purchasing power.

The guide was produced for the CRE by the Centre for Research into Ethnic Minority Businesses and is based on interviews with large purchasing organisations in the public and private sector who have implemented supplier diversity initiatives. CRÈME have considerable experience in this area through their development of a supplier diversity intermediary partnership.

The guide contains a step by step guide for organisations who wish to diversify their supply chains and detailed write ups of the case study interviews with organisations such as BT, the Environment Agency and Miller Construction.

The guide was launched on 17th April at the Asian Business Federation ‘Bringing together Trade and Knowledge Business Exhibition’ at the Reebok Stadium. The exhibition brings together ethnic minority business owners, purchasing organisations, business support providers and supplier diversity specialists.

Click here to view CRE Diversification Guide Executive Summary or the full report can be downloaded from the CRE website www.cre.gov.uk/supplierdiversity