Driving Procurement Excellence Through Diversity & Inclusion
In today's rapidly evolving business world, top leaders are realising that diversity, equity and inclusion (DE&I) are more than just buzzwords - they are key to procurement success. By weaving DE&I into procurement strategies, companies not only fulfil a moral responsibility but also gain a competitive edge that drives innovation, agility and cost-effectiveness. Organisations are now prioritising social value and sustainability in their supplier choices, often assigning a significant portion of scoring to these factors. This shift is reshaping supply chains to be more inclusive and sustainable. Forward-thinking procurement leaders are also nurturing diverse talent, fostering inclusive cultures and measuring the tangible impact of these initiatives, setting the stage for a more innovative and resilient future. Here we ask: exactly how are industry leaders driving procurement excellence through diversity, equity and inclusion?
Integrating DE&I into procurement strategies to drive sustainable and equitable supply chains
DE&I is now essential in modern procurement, with companies realising the value of diverse supply chains in driving innovation and competitiveness. A Hackett Group study revealed that businesses allocating at least 20% of their spend to diverse suppliers see up to 15% of annual sales tied to these efforts. This shows the tangible financial boost DE&I can provide, proving it is not just good ethics, it is smart business.
Jacqui Rock, Chief Commercial Officer for NHS England, explains how her organisation is driving this change: “One of the most fundamental things as part of our commercial strategy in the NHS and indeed across the whole of government, is to ensure that DE&I, sustainability, social value and environmental considerations are built into everything that we do as a government.
“A while ago we announced that social value would account for 10% of all procurement scoring. This is a very deliberate way of making sure that as we choose suppliers for whatever product and service it is into the NHS, we make sure that they have a social value proposition, whether that be environmental, sustainable or related to DE&I.”
At the Procurement and Supply Chain LIVE 2024 Women in Procurement panel, Rebecca Simpson, Chief Procurement Officer, Royal Mail aptly summarised: “Procurement is broader now - it’s not just about negotiation, but sustainability, ESG and ethics, which can play to women's strengths.”
In fact, KPMG recently reported that “research indicates women's empowerment and participation in decision-making processes are correlated with enhanced environmental stewardship”.
Promoting supplier diversity and measuring its impact
Promoting supplier diversity boosts brand perception and loyalty. Consumers and stakeholders increasingly favour companies with strong diversity initiatives. In a 2019 study for Coca-Cola, those aware of the company’s supplier diversity efforts were 45% more likely to view it as a champion of diversity, 25% more likely to have a positive opinion and 49% more likely to choose Coca-Cola products.
Procurement teams can measure the impact by tracking consumer sentiment, brand loyalty and sales linked to these initiatives. By fostering a more diverse supply chain, businesses can not only meet social responsibility goals but also enhance their market position and appeal to a wider, more loyal customer base. Jacqui expands upon this, saying: ”Creating a diverse environment is so important for us and we are very proud that the NHS is one of the most diverse organisations in the country. That needs to be reflected in the way that we buy things.
“We all want to work in a diverse environment. The more diversity we have, not only within our people and the way we conduct our business but also with our supply chain, it gives us greater innovation without a doubt. Definitely innovation gives us greater flexibility. I also think it gives you better value for money. Diversity, social value and inclusion all matter to the public, so it's really important that we make sure we are spending taxpayers' money appropriately.”
Fostering a culture of inclusion within teams and supplier networks
Also on the Procurement & Supply Chain LIVE Women in Procurement panel, Miriam Quattrone, Director of IMS Procurement Regions at Philip Morris International, says: “Corporate strategies should support the entire employee lifecycle, from hiring to the end of their careers.
“It’s important to have the right metrics to measure progress and create a gender-balanced environment, starting from recruitment. We need to be fair in how we evaluate performance and equip women with the right development programmes. Women in leadership also have a role in mentoring others and fostering diversity. I believe that as long as we, as an organisation, measure and maintain gender balance while encouraging aspiration, we’ll create big opportunities for women in leadership.”
Rebecca added: ”When we talk about leadership, it’s essential to remember that representation matters. Women in leadership positions serve as role models for the next generation. When younger women see others who look like them or share their experiences at the top, it inspires them to believe that they too can reach those heights. It's about breaking down those invisible barriers and creating a pathway for others to follow.”
“Sponsorship needs to come from the top,” Miriam also contributed. “The senior management team must be on board and support diversity initiatives like a corporate programme. It has to be embedded in the behaviour of individuals throughout their lifecycle. Diversity is a fact, but inclusion is an action. It needs to be part of both corporate and individual behaviour to ensure success in gender balance.”
The challenges and opportunities in implementing DE&I initiatives
The implementation of DE&I in global supply chains represents a number of challenges as well as opportunities; while 75% of supply chain organisations factor ethnicity and race into their DE&I strategies, only 40% are actively pursuing specific initiatives. This gap between intent and action is something Jacqui feels passionately about.
“I think there are quite a lot of challenges in truly implementing DE&I initiatives. On paper, it seems easy and there's probably not a company out there that doesn't have a policy. But actually making it real, making it live, making it tangible so people feel they're working in a diverse environment or that we are buying in a diverse way is where the challenges often lie. It's not just about doing it as a one-off or speaking about it at a conference. It’s about living it every single day. It has to be part of your mantra and part of the culture of your organisation.”
The complexity of global networks makes it hard to track progress, but the benefits are clear. Companies with strong supplier diversity programmes see a 133% higher ROI and are 60% more likely to outperform peers in decision-making. Embracing DE&I not only boosts profits but also attracts a millennial client-base, 64% of whom avoid companies with poor social responsibility records.
“I would say DE&I represents a big opportunity,” added Rebecca. “I’ve worked in procurement and supply chain for a long time and things have definitely changed over the last 20 years. We see women coming into the workplace, doing really well in graduate roles, but then they typically tail off a little, as life - like parenthood or caring responsibilities - comes into play.
“It’s about creating an environment where women can thrive. There’s a huge opportunity; we’ve seen growth in women in leadership positions in procurement and supply chain and I can see that personally from the people I meet.”
Meanwhile, Miriam pointed out the elephant in the room: “The fact that we even measure gender balance today highlights that we still have opportunities to improve, but it also gives us a direction to do things right throughout the employee lifecycle.
“Ultimately, though, the goal is to get to a point where we no longer need these measurements because we will have achieved a truly gender-balanced environment. Once we reach that stage, we can simply appreciate the work we do everywhere, without having to constantly focus on these metrics.”
Concluding the panel, Rebecca added: “Until that day comes, it's important that companies, boards and leaders continue to create environments where women feel supported and can thrive.
“It's not just about the policies or the formal structures but also about creating a culture that truly values diversity and inclusion. This can’t be achieved without making sure everyone in the organisation feels responsible for upholding those values.”
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