EVOLVE Business and Professional Magazine May 2018 | Page 24

COMPETITIVE ADVANTAGE:
SUPPLIER DIVERSITY
by Beatrice Louissaint
President and CEO Florida State Minority Supplier
Development Council
I
n business, supplier diversity can make the difference
between a market leader or a failing organization. A
wide array of suppliers allows a company to collect
inputs at competitive prices, helping to improve its
bottom-line performance.
For better results, companies should include minority-
owned businesses in their supplier base. This makes sense
for several reasons. This first is that minority-led suppliers
tend to be more accessible and nimble. Hence, buyers
can reach a decision-maker if problems arise with input
or service delivery, or if a fast solution is needed. Second,
minority suppliers must be competitive if they want
to win contracts. This means they must run leaner and
smarter businesses, which translates into better pricing,
product and service for the buyer.
A third advantage for buyers is the exposure to fresh
ideas and creativity. A report this year by McKinsey, a
management consulting firm, found that companies
with greater diversity in the workplace are 21% likelier
| 24 | EVOLVE BUSINESS AND PROFESSIONAL MAGAZINE
to outperform their peers. The same benefits come with
supplier diversity. As the president and CEO of the
Florida State Minority Supplier Development Council
(FSMSDC), it’s my job — and my passion — to promote
supplier diversity, and what I’ve found over the past 18
years is that more inclusion yields a competitive edge in
the supply chain. This is not just in pricing, but in access
to suppliers with the cultural and language competencies
the buyer may not have. This can help buyers to think
outside the box and reach new markets.
Supplier diversity also helps a company look like
their customer base. This is important in any procurement
strategy, especially B2C. If a company sells 20% of its
products to a minority group, the customers will want the
supplier base to reflect that. If it does, this can boost the
buyer’s image — and help the local economy. Minority
companies tend to hire other minorities, and this has an
impact on job creation and community development.
If customers take offense at the lack of diversity,
companies can suffer a backlash. We’re living in an era
of hyper-connectivity. Any individual has the power of
driving mass support over social media — and if negative
this can tarnish a company’s image. As Warren Buffett, the
hugely successful investor, once said: “It takes 20 years to
build a reputation and five minutes to ruin it.”
With the demographics of the U.S. getting more
diverse, this risk is only going to become greater — as