Supplier diversity began in the late 1960s and early 1970s in conjunction with the Civil Rights Movement in the United States.
Early U.S. government initiatives encouraged federal use of Minority Business Enterprises and Women’s Business Enterprises, but supplier diversity was not a mandate of the U.S. government. Certain industries with significant federal contracts—utilities, auto manufacturers, telecommunications—were among the first to become strong proponents of supplier diversity and soon recognized the benefits to their value chains.
In 1950, 9 out of every 10 Americans were White.
In 2000, 2.5 out of every 10 Americans were minority citizens.
In 2050, 5.3 out of every 10 Americans will be minority citizens.
Minorities were asking for a level opportunity to compete for business contracts.
March 5, 1969 President Nixon signed Executive Order 11458, which required government agencies and their contractors to contract with minority-owned companies and to report the results against pre-established goals.
- Supplier Diversity provides business owners with access to corporate buyers and evens the playing field for small businesses and suppliers.
- Supplier diversity is a procurement practice that involves purchasing supplies from businesses that are owned by minorities or women.
- Supplier diversity programs generate goodwill for corporations.
- Supplier diversity increases local jobs and enhances community engagement.
- Supplier diversity programs increase company profits.
A diverse supplier is defined as a business that is at least 51 percent owned, managed and controlled by a diverse person or group.
“Controlled" means actively exercising power to make policy decisions, and "operated" means active involvement in the daily management of the business.
Tier 1 suppliers are the companies that directly sell supplies and resources. Tier 2 suppliers are the companies that provide the tier 1 supplier with the product that is to be sold to the end user. The Tier 1 supplier may not be a minority or female-owned business, but they get the products they sell from suppliers that are minority or female-owned businesses. These suppliers are known as tier 2 suppliers. They don’t sell directly to the company, but they supply the companies that do.
Note: A diverse business can fall under several categories and can be certified in each of its appropriate diversity designations.
Why Corporations Value Their Diverse Suppliers
The RFP Success Book, Certification Chapter
Countries Certified by WEConnect International
The Business Case for Global Supplier Diversity and Inclusion: The Critical Contributions of Women and Other Underutilized Suppliers to Corporate Value Chains