Explained: Why Your Supply Chain Needs Diversity Now

Diversity brings new ideas and solutions to an organization, boosts competitiveness and market growth

Published: Thursday, February 24, 2022 - 13:02

The Chartered Institute of Procurement & Supply, a United Kingdom-based global professional body working for the purchasing and supply professions, suggests that every supply chain should enhance its diversity because this “can not only bring new ideas and solutions to an organization, but also boost competitiveness and market growth.”

That said, what value does a diverse supply chain bring?
• Drives transparency
• Drives competition
• Brings innovation
• Boosts market growth
• Supports local (and nonlocal) economy
• Enhances brand reputation

A background to supplier diversity

What is supplier diversity? Ultimately, supplier diversity refers to the purchasing of goods or services from minority, women, and LGBT suppliers. By sourcing suppliers from underrepresented groups, buyers can successfully enhance supply chain diversity.

There has been confusion surrounding the implementation of diversity into the supply chain, with business owners believing that it is simply a social program necessary to improve their brand’s image—rather than seeing it as an opportunity to seize the welcome benefits that we’ve highlighted above.

Perhaps now, more than ever before, in the post-Brexit, post-pandemic world that businesses are negotiating, there should be greater reason to introduce more diversity into the supply chain.

A diverse demographic

The population in the United Kingdom is changing, and the supply chains that are serving it should expect to change with it. Back in 2001, ethnic minorities accounted for 8 percent of the UK population, whereas predictions suggest that by the time we reach 2051, that figure will be 20 percent.

Without brushing over this topic as if it were some marketing ploy, there is no denying the fact that if you want to appeal to, attract, and retain consumers, you need to reflect them and, equally, resonate with them. Similarly, increasing diversity in positions at all levels of seniority throughout your business and your supply chain not only attracts new customers but also new staff.

This staff is, and for the foreseeable will be, millennials. By 2025, millennials will make up more of the global workforce than boomers. Millennials have grown up immersed in activism and campaigns for social good, and with good reason, they’re making sure these things are present in the modern workplace. One startling statistic when considering the approach of millennials to the workplace comes from Deloitte’s Global Millennial Report 2021, which highlights the fact that “the number of millennials who believe that business has a positive impact on society was 47 percent, marking the first time that figure has dipped below 50 percent.” That figure has fallen drastically from 76 percent back in 2018.

The report goes on to detail that 11 percent of millennials and 16 percent of Gen Zs consider diversity, equal opportunity, and discrimination as main concerns about the modern working environment, while at least one in five people said they feel personally discriminated against “all of the time.”

Prior to both Brexit and the pandemic, discussions about the inherent rise of skills gaps across a number of UK sectors were prominent. Fast forward two years and, unsurprisingly, the situation hasn’t improved.

Trucking hit with stark impacts of lack of diversification

You needn’t look too far back in time to find an example of where a sector has been drastically hit by a lack of diversity and diversification.

While there were additional factors involved in the shortage of commercial drivers in 2021, including increased workload, staff sicknesses, and a reduction in workers from overseas, much of the problem lay with the fact that the driver workforce, as a whole, is aging at an alarming rate.

Harry Holmes’ exclusive report in the Grocer noted: “What was once a quiet storm in the supply chain has escalated into a fully fledged hurricane... even in the heady days before Covid or Brexit, the UK was already lacking about 76,000 drivers.”

Age was one of the most prominent issues. More than 230,000 HGV (heavy-goods vehicle) license holders below the age of 45 have chosen not to enter the commercial transport sector. More worrying still, the average UK driver age is 50, and news reports—for instance, in the The Guardian—suggest that approximately one-third of the UK’s 380,000 drivers may retire within the next five years.

That said, retirement isn’t just the only concern—underrepresentation of females has also contributed to the significant skills gap in that sector. Despite transport companies now actively targeting women to consider a career in the industry, at present, women make up just 2 percent of the driver workforce.

How to improve diversity

We are by no means suggesting that if you have a very one-dimensional supply chain now that this is going to be an overnight fix. We understand that the transition to greater diversity will take both time and effort.

Start with your internal operations. Find out what you need in terms of suppliers, then take time to educate your entire business about the importance of achieving diversity. This isn’t just a matter for the procurement executives; this is an ethos that must be understood across the business and permeate throughout. Otherwise, it will inevitably fail.

Creating clearly defined business values is certainly another way of ensuring that you’re not only able to achieve diversity but also maintain it—as this gives you something to reflect on and refer back to when you face uncertainty. Similarly, make sure to report on successes and failings.

Finally, because all business requirements are not the same, they should not be treated in the same manner. By removing a “one size fits all” approach, you can successfully greet each new supply chain need with appropriate action—supported, of course, by the aforementioned business values.

Everyone has a supply chain, from multinational organizations to small-scale businesses fulfilling cleaning contracts. While both will face individual challenges when attempting to diversify their respective supply chains, it's important for them to approach decision making with an open mind.

Supplier diversity shouldn’t be seen as a special extra. It should be ingrained in your business as a must.

About The Author

Jonathan Gilpin

Jonathan Gilpin is a content executive for BiP Solutions. Having worked for six years in journalism and marketing, he currently specializes in procurement and employment.