Why Does Supply Chain Diversity & Inclusion Matter?
In boardrooms, there can be a disconnect between ‘the right thing to do’ and ‘the right thing to do for the business’.
In terms of sustainability, data and outcomes are increasingly showing that the two are codependent. Carbon cutting is likely to boost the bottom line.
But what about supply chain diversity and inclusion? Is it political correctness that risks eroding the foundations of businesses? Or are there spin-offs from embedding D&I?
If you put those questions to senior sustainability or supply chain executives, the response may well be a look of incredulity. For the case has long since been made.
Ken Smith, VP for Sustainability and Safety Europe at Bureau Veritas, makes it clear: enhanced supply chain D&I is right in every way.
Fitter, stronger, more resilient
Ken, who has been at Bureau Veritas for 12 years, says: “With diversity and inclusion comes a better performing organisation.
“That diversity of thought, that diversity of talent, that diversity that brings innovation and different ways of thinking leads to a stronger, better-performing organisation and a more resilient organisation.
“By having a more diverse organisation and policies and practises to recruit and to gain talent within the supply chain organisation, it means that you have a greater reach in terms of employment, a greater reach in terms of talent to allow you to become a better organisation and to fulfil your growth and recruitment needs.
“Trying to get good recruitment, effective recruitment, having a wider pool to work with because of your policies and processes allows you to gain a diverse organisation, makes you a fitter and stronger, more resilient and innovative organisation. I see that in many organisations as well as within Bureau Veritas.”
In boardrooms, there can be a disconnect between ‘the right thing to do’ and ‘the right thing to do for the business’.
In terms of sustainability, data and outcomes are increasingly showing that the two are codependent. Carbon cutting is likely to boost the bottom line.
But what about supply chain diversity and inclusion? Is it political correctness that risks eroding the foundations of businesses? Or are there spin-offs from embedding D&I?
If you put those questions to senior sustainability or supply chain executives, the response may well be a look of incredulity. For the case has long since been made.
Ken Smith, VP for Sustainability and Safety Europe at Bureau Veritas, makes it clear: enhanced supply chain D&I is right in every way.
Fitter, stronger, more resilient
Ken, who has been at Bureau Veritas for 12 years, says: “With diversity and inclusion comes a better performing organisation.
“That diversity of thought, that diversity of talent, that diversity that brings innovation and different ways of thinking leads to a stronger, better-performing organisation and a more resilient organisation.
“By having a more diverse organisation and policies and practises to recruit and to gain talent within the supply chain organisation, it means that you have a greater reach in terms of employment, a greater reach in terms of talent to allow you to become a better organisation and to fulfil your growth and recruitment needs.
“Trying to get good recruitment, effective recruitment, having a wider pool to work with because of your policies and processes allows you to gain a diverse organisation, makes you a fitter and stronger, more resilient and innovative organisation. I see that in many organisations as well as within Bureau Veritas.”
How can you define supply chain D&I?
The principle could hardly be clearer. But what is supply chain D&I in practice?
Broadly, it refers to deliberate, often targets-driven work by businesses to embed in their supply chain a wide range of suppliers, partners and stakeholders from diverse backgrounds and underrepresented groups.
The intention is to create a more equitable and innovative business ecosystem while also enhancing supply chain resilience and competitiveness.
Ken says: “I think it's the same in the supply chain as in any form of organisation, which is about diversity in ethnicity, diversity in gender, diversity in race, in sexuality and religious beliefs.
“So it's looking at that in terms of true practical diversity of every form. And then the inclusion that comes with that is actually how the working practices are of an organisation.
“Do they include diverse people in the culture and the way of the working of the organisation?”
A diverse and inclusive supply chain typically includes businesses that are at least 51% owned and operated by individuals from minority groups, women, LGBTQ+ people, people with disabilities and other historically underrepresented communities.
When it operates effectively, it fans out to increase representation in the business world, fostering change in large corporations and promoting a culture where diversity is the norm at every level of business.
Right for society: right for business
It is not possible to overemphasise how beneficial it is to embed diversity and inclusion into a business.
Andrea Hendrickx, Country Head – Germany at Infosys, says: "In the context of sustainability, supply chain diversity and inclusion play a pivotal role.
“By embracing a diverse and inclusive supply chain, organisations foster innovation, creativity and resilience. It brings with it a multitude of perspectives, ideas and solutions that can go towards addressing complex sustainability challenges."
The benefits of supply chain diversity and inclusion are numerous.
Research has shown that companies with a strong and diverse supplier network generated a 133% greater procurement return on investment than the average comparable firm. This equated to an extra US$3.6m to their bottom line for every US$1m in procurement operation costs.
Diverse suppliers are also often better positioned to help companies mitigate supply chain risks and aid resiliency, by providing access to a wider range of technologies, expertise and innovative solutions.
Andrea adds: "It is imperative to recognise that investing in supplier diversity can result in longer-term benefits."
Right for society: right for business
It is not possible to overemphasise how beneficial it is to embed diversity and inclusion into a business.
Andrea Hendrickx, Country Head – Germany at Infosys, says: "In the context of sustainability, supply chain diversity and inclusion play a pivotal role.
“By embracing a diverse and inclusive supply chain, organisations foster innovation, creativity and resilience. It brings with it a multitude of perspectives, ideas and solutions that can go towards addressing complex sustainability challenges."
The benefits of supply chain diversity and inclusion are numerous.
Research has shown that companies with a strong and diverse supplier network generated a 133% greater procurement return on investment than the average comparable firm. This equated to an extra US$3.6m to their bottom line for every US$1m in procurement operation costs.
Diverse suppliers are also often better positioned to help companies mitigate supply chain risks and aid resiliency, by providing access to a wider range of technologies, expertise and innovative solutions.
Andrea adds: "It is imperative to recognise that investing in supplier diversity can result in longer-term benefits."
In boardrooms, there can be a disconnect between ‘the right thing to do’ and ‘the right thing to do for the business’.
In terms of sustainability, data and outcomes are increasingly showing that the two are codependent. Carbon cutting is likely to boost the bottom line.
But what about supply chain diversity and inclusion? Is it political correctness that risks eroding the foundations of businesses? Or are there spin-offs from embedding D&I?
If you put those questions to senior sustainability or supply chain executives, the response may well be a look of incredulity. For the case has long since been made.
Ken Smith, VP for Sustainability and Safety Europe at Bureau Veritas, makes it clear: enhanced supply chain D&I is right in every way.
Fitter, stronger, more resilient
Ken, who has been at Bureau Veritas for 12 years, says: “With diversity and inclusion comes a better performing organisation.
“That diversity of thought, that diversity of talent, that diversity that brings innovation and different ways of thinking leads to a stronger, better-performing organisation and a more resilient organisation.
“By having a more diverse organisation and policies and practises to recruit and to gain talent within the supply chain organisation, it means that you have a greater reach in terms of employment, a greater reach in terms of talent to allow you to become a better organisation and to fulfil your growth and recruitment needs.
“Trying to get good recruitment, effective recruitment, having a wider pool to work with because of your policies and processes allows you to gain a diverse organisation, makes you a fitter and stronger, more resilient and innovative organisation. I see that in many organisations as well as within Bureau Veritas.”
How can you define supply chain D&I?
The principle could hardly be clearer. But what is supply chain D&I in practice?
Broadly, it refers to deliberate, often targets-driven work by businesses to embed in their supply chain a wide range of suppliers, partners and stakeholders from diverse backgrounds and underrepresented groups.
The intention is to create a more equitable and innovative business ecosystem while also enhancing supply chain resilience and competitiveness.
Ken says: “I think it's the same in the supply chain as in any form of organisation, which is about diversity in ethnicity, diversity in gender, diversity in race, in sexuality and religious beliefs.
“So it's looking at that in terms of true practical diversity of every form. And then the inclusion that comes with that is actually how the working practices are of an organisation.
“Do they include diverse people in the culture and the way of the working of the organisation?”
A diverse and inclusive supply chain typically includes businesses that are at least 51% owned and operated by individuals from minority groups, women, LGBTQ+ people, people with disabilities and other historically underrepresented communities.
When it operates effectively, it fans out to increase representation in the business world, fostering change in large corporations and promoting a culture where diversity is the norm at every level of business.
Right for society: right for business
It is not possible to overemphasise how beneficial it is to embed diversity and inclusion into a business.
Andrea Hendrickx, Country Head – Germany at Infosys, says: "In the context of sustainability, supply chain diversity and inclusion play a pivotal role.
“By embracing a diverse and inclusive supply chain, organisations foster innovation, creativity and resilience. It brings with it a multitude of perspectives, ideas and solutions that can go towards addressing complex sustainability challenges."
The benefits of supply chain diversity and inclusion are numerous.
Research has shown that companies with a strong and diverse supplier network generated a 133% greater procurement return on investment than the average comparable firm. This equated to an extra US$3.6m to their bottom line for every US$1m in procurement operation costs.
Diverse suppliers are also often better positioned to help companies mitigate supply chain risks and aid resiliency, by providing access to a wider range of technologies, expertise and innovative solutions.
Andrea adds: "It is imperative to recognise that investing in supplier diversity can result in longer-term benefits."
How to make it a reality
That deals with the what and the why – now how about the how?
Ken argues that the starting point is to ask: “What is the risk inside your supply chain when we look at it from a diversity and inclusion perspective?”
He adds: “I think understanding the geographic location, the type of organisations that are your major suppliers and putting that into a risk context, I think is number one.”
Number two necessitates holding up a mirror.
Ken says: “If you want to look at diversity and inclusion, you need to look at your own leadership and management people inside your own organisation first to give that element of diversity.
“My advice at this point to the clients that we work with is to define your requirements on diversity and inclusion and do that at the higher end of risk in your supply chain process.
“Do it in an engaging, collaborative, educational way, rather than mandating some very broad rules that may not be appropriate for certain types of supply chain.”
Only then should a company work with its supply chain, Ken says, to “define those requirements and then define the policy and the mechanism by which you will implement that policy and requirements with your supply chain”.
Third is to plan, do, check and act.
“Plan what you need to do, work with your suppliers in terms of defining requirements, then begin to gather some of the data from this: data that allows you to inform the process in an intelligent way.”
How is Bureau Veritas doing it?
Ken admits that, “as a very scientific engineering based organisation”, Bureau Veritas does not generally attract diversity, particularly on a gender basis.
But that does not mean targets and efforts are disregarded. Quite the opposite, in fact. He says: “We have targets very clearly that 35% of our organisation will be women, so that we have that greater gender diversity.
“And then, in the UK we explore more widely, for example, employee responsibility and groups. We have one on ethnicity and race, one on LGBT, one on gender. Another, specifically in terms of our career base, is one associated with ex-military.”
Moving that from internal to embedding D&I in its supply chain is less straightforward, but very achievable, Ken says.
“In terms of the way that we are working with clients, with that consumer-facing type of organisation, there's been an ever increasing way of working within the supply chain and using
“There are a number of food retail brand organisations that have been working in terms of not only risk, but also using certain audit and reference methodologies to be able to move into the supply chain and then gather that data.
“We also have our own code of ethics that we ask our supply chain to sign and we work with them on that.”
In summary, Ken recommends:
- look at the diversity and inclusion within your own sourcing organisation before going out into the supply chain.
- Engage in terms of your policy and requirements. Work with your supply chain to define what diversity and inclusion there is within the higher risk elements of the supply chain.
- Ask what it means to them and how they can enable it.
- Think about the type of data that you want to have back then that you can act on, rather than just having broad policies and lots of documentation that you are asking your suppliers for without them acting upon that.
- Take it in simple steps. Rather than trying to do a global broad-based programme, think about the simple steps working with some key high risk suppliers, defining the requirements, defining the data, acting on that and then beginning to roll it out more widely.
To read the full story in the magazine click HERE
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