Supply chain teams that invest in DEI 'will fare better' during disruption

20 June 2022

Supply chain teams that invest in diversity, equity and inclusion (DEI) initiatives will be better placed to tackle disruption, according to a report.

The report, by Gartner and the Association for Supply Chain Management (ASCM), said recruiting and retaining talent was critical to keeping supply chains running.

Abe Eshkenazi, CEO at the ASCM, said: “With no let-up in sight for this continued state of disruption, companies who fail to secure the talent necessary to keep global supply chains running sustainably and profitably, will no doubt find themselves in the red. 

“Public or private, large or small – companies who invest in DEI initiatives will fare better.”

The report, based on a survey of 384 supply chain professionals mostly in the US, Canada and Europe, found representation of people of colour was higher at every level when a company was publicly-owned.

People of colour made up 35% of the overall supply chain workforce, and 13% of vice presidents, in publicly-held firms, but 30% of the workforce and 7% of vice presidents in private companies.

The survey suggested public companies face more scrutiny from stakeholders and face significant losses if they do not make their people strategies relevant. 

Supply chain salaries were higher across all ethnic groups compared to last year. However, publicly-held organisations show higher pay for all supply chain professionals, and people of colour earn, on average, 25% more at public firms compared to private ones.

“What we need to do is completely close the gap – so that all organisations, public and private, are places where racial and ethnic minorities, women, LGBTQ, physical ability and others have equal opportunities,” said Eshkenazi.

The survey found 75% of supply chain organisations considered ethnicity/race in DEI strategies, but just 40% were working on specific initiatives.

Talent competition and labour shortages mean that companies must deliver an equitable employee experience or fail to secure their global supply chain, the survey suggested. It noted last year 21% of companies had no DEI focus. This year that figure fell to 11%.

In a webinar, Gartner advised small and privately-held companies to set specific objectives, “bake in” proven DEI practices to existing processes, and establish a company-wide culture of instruction and development.

The survey found 93% of large, global supply chain organisations had DEI goals, and were two-and-a-half times more likely to have targeted DEI initiatives. Three-quarters of respondents reported improvement when supply chain led initiatives, compared to 50% when enterprises did so.

Most organisations left leaders without support beyond the objectives themselves. Gartner advised chief supply chain officers to monitor leaders’ progress, foster peer-to-peer transparency, and elevate DEI outcomes to the same priority as other business goals by making them a requirement for advancement.

Just over half (51%) of respondents said equipping leadership to think and act more inclusively improved DEI outcomes for people of colour. Additionally, 43% said improvements came with increased corporate investment in these strategies and initiatives.

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