Top 10: Supplier Diversity Best Practices

Supplier diversity has become essential to any successful procurement strategy. A diverse supplier base strengthens supply chain resilience, sparks innovation and delivers meaningful social impact.

Leading companies such as Walmart, Johnson & Johnson and IBM are among those demonstrating why a robust supplier diversity programme requires careful planning, continuous effort and a strategic approach.

Here, Supply Chain Digital takes a look at the top 10 supplier diversity best practices that procurement and supply chain teams would be well placed to adopt.

Regularly review and refine strategies

For supplier diversity programmes to remain effective, procurement teams must regularly evaluate and adapt their approaches.

Continuous review ensures strategies align with business goals, market changes and new opportunities, thus maintaining the programme’s relevance and maximising its impact.

General Motors (GM) exemplifies this practice by conducting annual verification surveys to assess its supplier diversity initiatives. Such reviews allow organisations to measure progress, identify gaps and implement necessary improvements.

Participate in diversity events and organisations

Engaging with supplier diversity events and organisations is a powerful way to connect with potential suppliers and industry peers. These platforms provide opportunities for networking, sharing best practices and staying informed about the latest trends.

Participation also highlights a company’s commitment to fostering diversity and inclusion.

Capital One’s Supplier Diversity Summit is one such example. The event brings together diverse business owners, corporate leaders, community partners and other suppliers to collaborate and create new opportunities. 

Leverage technology for supplier management

Technology plays a critical role in discovering, evaluating and managing diverse suppliers.

Modern procurement platforms improve efficiency, enhance visibility into supplier performance and enable better tracking of diversity spending. This data-driven approach supports informed decision-making and helps companies measure their progress.

At Microsoft, procurement teams actively track diverse spend as one of the company’s core metrics. Buyers are encouraged to consider diverse suppliers whenever possible, ensuring that diversity remains embedded in procurement practices.

Expand impact with tier 2 programmes

Tier 2 supplier diversity programmes extend the benefits of diversity efforts across the entire supply chain.

By encouraging primary suppliers to engage diverse subcontractors, businesses create a multiplier effect that amplifies economic impact and fosters inclusion.

Ford implements a robust tier 2 programme by requiring suppliers to submit quarterly reports detailing their spending with diverse subcontractors. This transparency ensures accountability and promotes ongoing engagement with diverse suppliers.

Collaborate with internal stakeholders

Cross-functional collaboration is key to aligning supplier diversity initiatives with broader business objectives.

By engaging other departments, procurement teams can uncover new opportunities, gather insights and secure organisation-wide support for diversity efforts.

Coca-Cola’s procurement team works closely with marketing, product development and other departments to identify areas where diverse suppliers can contribute. This integrated approach ensures supplier diversity is prioritised across all facets of the business.

Implement mentorship and capacity-building initiatives

Supplier diversity is about more than sourcing; it’s also about developing long-term relationships and helping suppliers grow.

Mentorship and capacity-building initiatives equip diverse suppliers with the tools, training and connections they need to thrive.

Unilever runs a programme specifically designed to help diverse businesses prepare for supply chain partnerships. By offering mentorship, training and access to networks, the company strengthens its supplier base while fostering innovation and community development.

Make use of certification bodies and databases

Supplier diversity databases and third-party certification bodies make it easier to identify qualified diverse suppliers.

These resources streamline the verification process, ensure compliance with diversity requirements and expand the pool of potential suppliers.

P&G requires its diverse suppliers to be third-party certified. This approach guarantees that suppliers meet the standards and spirit of the company’s diversity programme, ensuring credibility and alignment with organisational goals.

Train procurement teams in supplier diversity

Training is essential to building a culture of inclusion within procurement teams.

By equipping staff with the knowledge and skills to engage diverse suppliers effectively, companies can enhance their diversity efforts and build stronger relationships.

IBM’s 'Be Equal' initiative promotes diversity and inclusion across all aspects of the company’s operations. Originally launched to support gender equality, the programme now includes broader equality initiatives, encouraging individuals and organisations to advocate for diversity and become allies.

Integrate diversity into procurement strategy

Supplier diversity should not be treated as a standalone initiative; instead, it must be embedded within the organisation’s overall procurement strategy.

By making diversity a standard consideration in sourcing decisions, companies achieve more consistent and impactful results.

At Johnson & Johnson, supplier selection is based on merit, with opportunities extended to diverse suppliers through mentoring, training and external resources. The company partners with more than 30 advocacy organisations to identify and support small and diverse suppliers globally, embedding diversity within its procurement practices.

Set clear goals and measure progress

Clear and measurable goals are essential for driving supplier diversity. By setting targets and tracking performance, procurement teams can demonstrate progress, identify areas for improvement and keep diversity efforts a top priority.

Walmart sets a strong example. In the 2023 financial year, Walmart spent more than $13bn with diverse-, women- and veteran-owned businesses in the US. The company actively works to include and support these suppliers, fostering their growth while helping customers save money and live better lives.

By bringing intentionality to these relationships, Walmart helps suppliers and entrepreneurs to grow and, in the process, helps customers and members save money and live better lives.

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