Co-authored by Sophi Kravitz.
What is a Supplier Diversity Program?
Black History Month (the month of February in the U.S. and Canada) is a great time to celebrate people in the African diaspora and consider how we can be more inclusive. We’re proud to highlight some diversity-forward work that is being done in our industry.
One of the things we’ve seen and like is companies creating and using a supplier diversity program. A supplier diversity program employs a business strategy that commits to a certain percentage of procurement from a diverse supplier. A diverse supplier is defined as a company that is 51% or more owned by a person or people from a traditionally underrepresented group.
Several groups that fall into this category. Supplier diversity programs address systemic racism iby creating actionable economic benefit through procurement from minority-owned business enterprises (MBEs). It is estimated that minority-owned businesses create 2.2 million jobs in the United States.
The concept of supplier diversity began in the 1960s during the American Civil Rights Legislation. The first supplier diversity program was set up by General Motors in 1968 in response to the social and political conditions at the time. Shortly thereafter, IBM created its program, and expanded it further in 2003. Later, the United States government set up a program through Public Law 95-507 to encourage government contractors to include MBEs in their supply chains.
Supplier Diversity Efforts in The Electronics Industry
Suppliers are a crucial part of the electronics value chain, providing partnerships that drive the industry as a whole. Cultivating a strong relationship with your suppliers not only mitigates risk, but it also opens up opportunities for deeper collaboration and better outcomes for everyone involved.
A supplier diversity program offers numerous benefits for the business as a whole, and as part of our focus on highlighting diversity in the electronics value chain, we would like to call out several organizations’ efforts to grow and cultivate their own supplier diversity programs:
Schneider Electric has an excellent supplier diversity program, with a focus on building business relationships with integrity and seeking out the “best,” regardless of ethnic, racial, or social, gender, disabled persons, and veteran background. To qualify for the program, the supplier must be at least 51% owned, controlled, or operated by a woman or someone of African American, Asian-Indian American, Native American, Asian-Pacific American, or Hispanic American descent.
As part of this program, suppliers can register and utilize certifications from a broad range of third-party agencies to provide supporting materials as part of the registration process. A full breakdown of the process and requirements provides excellent transparency and opportunity for suppliers of all sizes and backgrounds to have an equal opportunity for consideration.
Jabil’s focus on diversity and inclusion goes beyond its internal company focus. As the company’s supplier diversity page explains, “We believe that it is important to do business with suppliers who represent the diversity of our employees, communities, and the customers we serve.”
The Jabil supplier diversity page lists a wide range of third-party agencies that can be contacted for certification requirements, policies, and procedures, allowing suppliers to obtain the necessary supporting documents needed to qualify for Jabil’s supplier diversity program.
As a company with more than 260,000 diverse employees across 100 locations and 30 countries, Jabil is a powerful force for good in leveraging its internal diversity and reach to connect with suppliers of all backgrounds and specialties in locations around the globe.
Texas Instruments (TI) is one of the world’s largest semiconductor companies, with more than 30,000 employees around the globe. TI offers its supplier diversity program via a registration page that outlines the requirements to qualify.
As with other programs, program members must be certified by a third-party agency to be at least 51% owned, controlled, or managed by U.S. citizens that are members of one or more specific social and economic minority groups.
These groups include Asian-Pacific Americans, African-Americans, Asian-Indian Americans, Hispanic-Americans, Native Americans, and women.
As part of the online registration form, potential suppliers are able to upload supporting documents like certifications, along with company profile documentation that allows prospects to showcase their unique competitive advantages for consideration.
Encouraging Diversity Across The Global Electronics Industry
As we close out Black History Month for 2021, organizations across the global electronics value chain have an opportunity to renew and refocus their efforts towards diversity and inclusiveness, both internally and externally across the supply chain.
We are proud to work with organizations that offer competitive supplier diversity programs, and that actively seek to encourage diversity throughout our industry.