PurchTips - Edition # 121

 

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7 Supplier Diversity Challenges, Part I

By Charles Dominick, SPSM, SPSM2, SPSM3

What Are The Challenges Of Using Diverse Suppliers?

As corporate social responsibility becomes more widely discussed, more organizations are asking purchasing departments to increase supplier diversity spend. But supplier diversity programs have unique challenges.

Challenge #1: Deciding what types of suppliers will be considered diverse suppliers. While this may seem like a no- brainer, it is actually very important to think through the options at the very beginning. Not recognizing one supplier group as diverse suppliers can cause problems later. Recognizing diverse supplier groups later can negatively impact your year-over-year comparison of metrics. Here are some common types of suppliers considered to be diverse suppliers:

  • Businesses that are at least 51% owned, controlled and operated by an ethnic minority, ethnic minorities, a woman, women, a veteran, or veterans
  • Small businesses
  • Business that are located in formally recognized economically distressed areas

Challenge #2: Tracking the use of diverse suppliers. There's an old business saying "What gets measured gets done." So to ensure actual use of diverse suppliers, you need an easy way to determine how much your organization is spending with them.

There is a lot of "behind the scenes" work in order to make this happen, including:

  • Setting up fields in your purchasing system to accommodate a supplier diversity classification
  • Identifying diverse suppliers in your system and updating their profiles with the appropriate diversity classification
  • Revising your supplier registration process so that the appropriate diversity classification is applied to new suppliers entered in the system
  • Having your information systems specialists create custom reports based on the entries in the supplier diversity classification fields

In addition, you also must strategize how to handle "double counting" supplier diversity spend. Double counting can occur when doing business with a supplier that qualifies for two or more diversity classifications,such as a supplier that is both a woman-owned business and a minority-owned business. You need to decide whether to pick one of those classifications for reporting purposes in accordance with a hierarchy, divide the spend among the classifications, or report the whole amount in multiple categories.

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Spotlight On Professional Development Opportunities

SPSM Certification

Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.

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Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

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Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) at:

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices  into your organization and achieve your career potential. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

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Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

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