Supplier Diversity Part II: Supplier Diversity on the World Stage

Sustainability
by Jarrod McAdoo

As mentioned in Part I of this series on supplier diversity, the United States has taken over half a century to develop its supplier diversity culture into what it is today. This makes the U.S. the seasoned vet in the clubhouse, but that is not to say that there have not been significant efforts elsewhere in the last 20 years.  There have been impressive examples of supplier diversity efforts in other countries, as well.

Agile Procurement in Canada

Since 2004, Canada has benefited from the establishment of the Canadian Aboriginal and Minority Supplier Council (CAMSC) that has worked tirelessly to ”facilitate business relationships with Canadian corporations and supplier organizations owned by Aboriginals and minorities.” Since 2004, more than $5 billion have been spent with CAMSC certified Aboriginal and minority-owned businesses by member corporations. This foundational organization has been buoyed by action from the Canadian government, which launched a new agile procurement initiative in 2018 with the stated purpose of making its procurement process simpler and less burdensome for small and diverse businesses.   

Social Procurement Framework in European Union

In 2014, the European Union took steps to encourage supplier diversity by implementing a social procurement policy.  This has caused many enterprises to focus on the concepts of buying with social impact, including promoting work opportunities, improving working conditions, as well as social inclusion and accessibility.  They have even gone as far as publishing 71 good practice cases on socially responsible procurement in 2020 to promote these ideals.  

Raising the Bar in Supplier Diversity Down Under 

While the initiatives in the EU and Canada are well-conceived and are generating benefits, they differ from U.S. programs in that they fall short of the mandate to allocate funds to diverse suppliers like with federal contracts.  This mandate had not been widely embraced outside of the United States, but that all changed when Australia implemented the Indigenous Procurement Policy. This imposes mandatory requirements around the inclusion of  Indigenous businesses in potential opportunities without an overly burdensome and costly tender process. 

The efforts to facilitate implementation of this policy has been aided by Supply Nation, which is reminiscent of NMSDC. Supply Nation certifies Indigenous businesses and maintains a comprehensive directory and active community to connect these suppliers with buyers in all sectors,public and private. 

Efforts in both Australia and New Zealand are worth recognition as they have demonstrated a clear commitment to these efforts and have shown great progress. While they have not been doing this as long as the U.S., I would be willing to say their relative progress over the shorter span of time compares very favorably.     

Now that we understand supplier diversity on the macro level, we will spend the third and final installment of this series focusing on supplier diversity for you and your organization. How can your organization keep pace and what tactics can be used to ensure ethical supplier diversity? We’ll answer those questions next time. Be sure to visit the Ivalua blog for fresh content.

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Author

Jarrod McAdoo

Senior Product Marketing Manager

Jarrod McAdoo brings over 22 years of procurement experience across multiple industries, including higher education, retail, manufacturing, and engineered products.  During this time, Jarrod held various roles in category and supplier management including the management of strategic sourcing and procurement teams as well as leading teams in implementing shared service procurement models and source to pay systems.  Jarrod holds a Masters in Business Administration from Duquesne University and a Bachelor’s degree from Carnegie Mellon University.

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