Diversity drives in supply chains power innovation and profit as well as supporting under-represented communities, an event was told.
Eco Vadis’s Sustain 2022 conference heard that Levi's was using data to move diversity issues from a “fluffy topic” to one that is metric-driven, while AstraZeneca was capturing and recording data to improve visibility.
Anna Hakobyan, global supplier diversity, sustainability & government compliance lead at AstraZeneca, said supplier diversity targets were essential for business innovation and they need to become part of an overall business strategy.
She said: “While procurement plays a significant role in driving supplier diversity, we can accelerate our impact if we bring our business stakeholder community with us on this journey and have them be intentionally inclusive. Driving supplier diversity within procurement alone is no longer sufficient. Instead, it must be part of the overall business strategy.”
AstraZeneca, which helped lead the world’s race to produce a Covid-19 vaccine, has established various programmes to prioritise diverse suppliers in supply chains.
Speaking on a panel, Hakobyan explained the company had dedicated programmes in the US, Brazil, South Africa, UK, Australia, New Zealand, and Poland to identify and partner with under-represented businesses.
Each category strategy must have targets and action plans to maximise spend with small and diverse businesses. Additionally, the diversity status of Astrazeneca’s suppliers is captured and recorded into data systems as part of its vendor onboarding process, which allows procurement teams to have a better visibility and use of suppliers.
The company has introduced a mentorship programme for these suppliers, working with them to help them achieve sustainability and business goals through individual one-on-one sessions and seminars.
Additionally the company has launched a supplier diversity programme for black women-owned businesses to offer training in sustainability, ensure business continuity, and help them establish a competitive advantage.
Hakobyan explained diversity and sustainability efforts must be seen as a united front, as diverse businesses which don’t have the spending power to invest in sustainability strategies will “soon be out of competitive advantage”.
She said: “That's why it's very important we build our sustainability within our organisation and we also help our diverse suppliers to build their programmes as well.”
This directly links to a company’s success in producing innovation, she explained.
Hakobyan said: “If you think about what makes the company successful, it's the innovative solutions they bring to the marketplace that generate profit. Where that innovation is coming from is diverse thinking that is coming from the workforce and through our suppliers.
“The more we're inclusive of diverse thinking, the more and more we are driving the diversity of thought, which creates the chain reaction. We get new products and innovative solutions, which generate more and more profit for the organisation.”
Panel member Lisa Spice, director of global strategic sourcing & supplier inclusion at Levi Strauss & Co, argued supply chains must go beyond diversity and consider the inclusivity of the policies and values of suppliers.
She said while diversity can reference who owns the business, by looking at the inclusivity of suppliers, Levi's can assess whether suppliers’ values reflect their own.
This includes looking at how suppliers manage anti-bullying and harassment policies, whistleblowing, and gender equality.
“Our supplier inclusion programme is much more looking at how inclusive our suppliers are as employers and we're trying to echo our own values around inclusion into our supply base.”
Spice said procurement teams can’t afford to not prioritise diversity within their supply chains.
“It's the thing you can't afford not to do. Because for us, we need our business, our supply base to represent who our consumers are. And that is the changing world, and a changing market. There is more and more demand from those consumers that we as a business, reflect that back in our business and also in our supplier base.”
Spice said when introducing a diversity and inclusion plan, don’t underestimate the power and scale of data.
Spice said: “Getting your systems aligned and getting your reporting aligned is really difficult to get all structured together. It's a long thing to unlock, but when you do unlock it, it becomes so powerful and adds to the communication because it stops this becoming a fluffy topic, and starts becoming metric-driven. Your CFO will be much much happier when you've got the numbers and the metrics in front of you.”