Supplier Diversity Programmes Grow in Importance and Reach

Supplier diversity is no longer just a box to tick; it’s becoming a driving force behind innovation, social responsibility and business growth.

According to Supplier.io's latest 2024 State of Supplier Diversity Report, 71% of businesses say these programmes are more important now than ever before.

Here, we take a look at what’s driving this shift and the key trends shaping the landscape.

Maturity and growth potential

The maturity of supplier diversity programmes is showing clear signs of progress. About 39% of the businesses surveyed have had a supplier diversity programme in place for over a decade, demonstrating long-term commitment.

However, there’s still plenty of room for growth, as 22% of businesses reported their programmes are less than three years old. Most of these initiatives (62%) are housed within procurement or supply chain departments, while 21% operate as standalone units.

With 63% of businesses planning to boost their supplier diversity budgets, the future looks bright for these initiatives and many companies expect their programmes to expand into new areas, including LGBTQ+, disability-owned and veteran-owned businesses.

"The landscape of supplier diversity has undergone transformative changes recently," comments Aylin Basom, CEO at Supplier.io. 

"Based on key findings from the report, more organisations are now reporting supplier diversity results directly to CEOs and Boards, reflecting the increasing recognition of its strategic importance.

"Consequently, supplier diversity has become integral not only to business ethics but also to competitive strategy, enhancing brand reputation, winning new business and sharpening supply chain efficiencies.

"Expectations and accountability are higher, the risks are greater and the strategic role of supplier diversity has increased.

"We are inspired by the accomplishments within supplier diversity and excited about the future," Aylin concludes. 

Technology and reporting driving progress

Technology is playing an increasingly pivotal role in the success of supplier diversity programmes.

A significant 66% of businesses now use supplier diversity management systems and 59% have implemented supplier registration portals to better track and manage their diverse suppliers. Data collection has also become crucial, with 74% of respondents gathering diversity certifications from their suppliers.

Reporting on progress is also becoming standard practice, with 78% of businesses producing internal reports and 48% sharing external reports with stakeholders. This focus on transparency not only helps measure success but also strengthens the case for ongoing investment in these programmes.

Key challenges and opportunities

Despite the progress, supplier diversity programmes aren’t without their challenges. Limited resources remain the top concern, with 54% of respondents struggling to secure the necessary funding or manpower.

Another major hurdle is the difficulty in finding qualified diverse suppliers, which 48% of respondents reported as a significant issue. Additionally, 36% said they face a lack of buy-in from key stakeholders, which can hinder the success of these programmes.

On the flip side, these challenges also present opportunities for growth. Businesses are actively seeking to expand their supplier diversity efforts, with 73% of respondents planning to add new diverse supplier categories and 66% using technology like supplier diversity management systems to streamline operations.

What does the future look like? 

The future for supplier diversity is promising. An impressive 82% of businesses expect their programmes to grow in the next one to two years.

The main areas of focus for this expansion will include increasing diverse spend, adding new categories of diverse suppliers and improving data collection and reporting practices. There’s also a growing emphasis on integrating these efforts with broader corporate social responsibility (CSR) and sustainability initiatives.

As businesses continue to recognise the value of supplier diversity, they’re not just building more inclusive supply chains—they’re creating pathways to innovation, resilience and long-term competitive advantage.

By addressing existing challenges, adopting new technologies and expanding their global reach, companies are ensuring that supplier diversity remains a key component to future success.

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