5 Steps to Kickstart your Supplier Diversity Action Plan

A good reputation is more valuable than money – and the only way to build a good reputation is to balance measures that benefit the community and those that directly grow the organisation. The test for a successful supplier diversity program is not whether the cause is well intentioned, but whether it creates mutual benefits for the society and the business.

The only way to ensure your supplier diversity program is positioned to maximise outcomes for your business and the community is to ensure that you have an action plan that properly lays the foundation for success. If you commit to adding the following five steps to your action plan, your organisation will be well on its way to achieving success.

1. Establish a Supplier Diversity policy

A Supplier Diversity policy gives companies a formal process that encourages and informs how to procure from Indigenous business, rather than relying on informal commitments. Executive endorsement of the policy adds credibility to the organisation and program. In the drafting process, businesses should ensure the policy answers the following questions:

  1. Who are the beneficiaries and why do they need representation?
  2. What are the benefits stemming from the implementation of this policy for stakeholders?
  3. How will this policy complement other policies?
  4. What actions must be undertaken by procurement teams?

To ensure accountability, the Action Plan should clearly stipulate who is responsible for embedding supplier diversity and the expected timeframe in which this should take place.

2. Incorporate Supplier Diversity into procurement

A Supplier Diversity program may reduce risk in the supply chain by enhancing positive brand awareness. To realise these gains, the program must be managed by the procurement team as only they can develop the program to a sustainable level. It also demonstrates to stakeholders that diversity is a serious business priority, not just a tick box exercise.

Procurement teams can use their purchasing power to drive innovation and shape the business’ reputation. The creation of economic and social value for the organisation is most successful if procurement has influence at a boardroom level. The opportunities in the supply chain are immense, with approximately 12% of government GDP in OECD countries being spent on procurement. Engaging with minority suppliers injects social value into the supply chain, which means the procurement team is responsible for economic empowerment as well as cost savings.

3. Develop a Reconciliation Action Plan

During the 2013/2014 financial year, Supply Nation Members with a Reconciliation Action Plan (RAP) purchased $20.2m worth of goods and services from Certified Suppliers. This is comparable to the $3.9m spent by non-RAP members[1]. RAPs increase Indigenous economic engagement. They encourage companies to outline measures that build economic and social relations between Indigenous and non-Indigenous Australians. Based on all transactions to date, Members with a RAP engaged in 2.23 times more business than those without, demonstrating the power of a RAP in driving Indigenous procurement. To find out how to begin developing your RAP, visit the Reconciliation Australia website.

4. Take the First Step

Supply Nation’s innovative First Step training sessions explain how to establish and implement supplier diversity policy. One participant claimed they now ‘understood the importance of policy and building buy-in to effect change.’ Educating staff about the Action Plan is an important part of the implementation of supplier diversity, and attending First Step training is the perfect way to achieve it. To book into the next available First Step, click here.

5. Network through events

Most things are better when experienced in person, and supplier diversity is no exception. As it is about building relationships, face-to-face networking is key to understanding how suppliers engage in a business capacity.

By talking face to face with Indigenous businesses, you can see how their business might be able to serve yours, you can discuss upcoming opportunities, and you can assess the capability of the Indigenous business market. By attending events such as Connect, companies become exposed to a more diverse supplier options and can begin to build a network of capable Indigenous businesses. To find out what events are on in your area, click here.

Regardless of whether you are at the stage of designing, implementing, or refining a supplier diversity program, by engaging Indigenous businesses you are contributing to a prosperous and fair Australian economy. However, if your program is to be successful and sustainable, you will have to carefully plan your supplier diversity action plan and report on your successes and failures.



[1] This figure has been controlled for outliers