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by Sandra Lopes, Manager, Policy and Research
Many Canadian companies have come to recognize and embrace the benefits of diversity in their workforce and in their leadership. But how many have ethnic and racial diversity in their supply chains?
Upcoming research by Dr. Paul D. Larson, CN Professor of SCM, for the DiverseCity Counts project explores this question. He will look at the supply chain policies and practices of large public, private and voluntary organizations in Toronto and Chicago, to explore whether, why and how organizations have embraced diversity in their purchasing and supply chain strategies, policies and practices. This is incredibly important research given that in Canada, one in six individuals are members of a visible minority group – and in Toronto, this ratio jumps to almost one in two.
While the results are still unavailable, the research has found that some companies have made diverse procurement a priority. These are some of the reasons they may be taking this on:
It seems, for example, that through diverse procurement companies can expand their business. One oft-cited example is Centerplate, the largest hospitality company in the world, providing food for venues like Yankee stadium. To diversify the kind of food they can provide to their Toronto customers, they reached out to Island Mix, a local catering company specializing in Caribbean cuisine. This has helped Centreplate accessing a new and growing market in the Toronto area.
Diversity in the supply chain can also create value for money. Large companies that purchase raw materials, products and professional services from other, often smaller organizations, sometimes unintentionally exclude smaller diverse suppliers. This is because there are often “unwritten rules,” closed processes, and informal networks which unintentionally exclude minority suppliers. By opening the bidding process to a larger number of companies, they are more likely to find the best proposal.
Organizations that inject diversity priorities into their procurement practices are likely to enhance their organization’s reputation. This can be done in two ways. First, they can work with new suppliers that are owned and operated by diverse staff. By doing this, they are supporting the leadership development of those operators, and they may be seen as a more friendly company to new ethnic and racial communities. Second, they can work with their traditional suppliers to explicitly encourage diversity practices. By doing so they are encouraging organizations to make this issue a priority, and are seen as leaders on diversity issues in their community. A good example of this in practice is A Call to Action Canada, a group of companies that have signed a pledge to take diversity into account when selecting their legal services.
Dr. Larson’s findings will be released on November 21, 2012 in Toronto. Visit our registration page for more details.
This blog post was originally published a PMAC newsletter.