Diversity Needed to Strengthen Today’s Supply Chains: Insight from the Eli Broad College of Business at Michigan State University

Provided by Michigan State University

With an increase in information sharing and transparency due to the internet, consumers everywhere are better able to examine the complexities — and weaknesses — of an organization’s supply chain. In an age when consumers expect their purchases to reflect their values and use social media to share their values and purchasing habits, companies are stepping up to meet those expectations of diversity, sustainability and ethical procurement practices. Though some may see ethics and profits as forever mutually exclusive, savvy organizations are recognizing that shirking their corporate social responsibility can actually cut into profits and cost them the much-needed talent, innovation and customer loyalty that diverse suppliers can bring.

There are three primary drivers for the push for diversity in supply chains. The first is that the vendor base for supply chains is, in itself, becoming more diverse. Minority business enterprise sales are growing 34 percent annually—twice as fast as the national average, according to the CVM Solutions’ report How to Measure Your Supplier Diversity Programs’ Success, meaning they are fast becoming a significant force of economic growth.

The second is that supply chain diversity has a demonstrable return. Walmart sourced almost $250 million internationally from women-owned businesses in 2016 through its Women’s Economic Empowerment initiative. “When you invest in women, they put their earnings back into the community,” says Jenny Grieser, Senior Director of Walmart’s Women’s Economic Empowerment initiative. “Women are our primary customers. In the long run, they benefit the world, but they also benefit our business.”

The third is that diversity is an increasing concern for customers. Millennials and Generation Z are the most diverse generations in U.S. history, and they’re also two of the largest. Diversity is an important value for these consumers, and they are more likely to shop at and work for organizations that reflect their values. More diverse and ethical supply chain practices can be key attractors for this consumer base.

Supply chain diversity requires critical thinking and well-reasoned strategy, which are critical dimensions of Michigan State University’s Eli Broad College of Business’ Master of Science in Supply Chain Management degree program. U.S. News & World Report said Michigan State is the No. 1 Supply Chain Graduate Degree Program for 2020.