DiverseCity Counts 6: Supplier Diversity in the GTA: Business Case and Best Practice (2012)

Dr. Paul D. Larson, CN Professor of Supply Chain Management at the University of Manitoba, examines whether, why and how organizations have embraced diversity in their purchasing and supply chain strategies, policies and practices, in Toronto and Chicago.

The research focused on organizations that buy goods and services from other organizations that are at least 50% owned and operated by visible minorities. It conducted an electronic survey of more than 165 organizations and a web scan of more than 138 in the Greater Toronto Area that together account for over $100 billion of dollars spent in the region, or approximately 33% of the region’s economic activity.

The research found that while most organizations have employee diversity policies, significantly fewer have supplier diversity programs.

Organizations that do have a supplier diversity program credit much of their success to top management commitment and efforts to work closely with current or future suppliers. Some organizations report difficulty finding qualified minority suppliers or determining which organizations are led by visible minorities. Of those organizations with a supplier diversity program, 29% do not track how much they spend on goods and services provided by visible minority owned companies.

Organizations that inject diversity priorities into their procurement practices are diversity leaders. They are able to leverage relationships with traditional suppliers to explicitly encourage diversity practices. When choosing a supplier, for example, they may consider whether the organization tracks the diversity of its workforce or has a diversity policy, and by doing so are encouraging diverse leadership talent.

When those large organizations choose to do business with visible minority and immigrant business owners, they are supporting the leadership development of those operators. This opens the possibility of creating a pipeline for diverse leadership within their own organizations and networks.

This begs the question: To what extent has diversity in procurement taken hold in the GTA – the most diverse region in Canada? And how does it compare to a similar American urban area – the region of Chicago?

See the full report, Supplier Diversity in the GTA: Business Case and Best Practices, or download the summary of the research.

See the DiverseCity website for more.

Contact: Catherine Winter, DiverseCity OnBoard, Global Diversity Exchange, catherine.winter[at]Ryerson.ca