Consumers are becoming more knowledgeable about whether brands support their beliefs, whether that support is for small or minority-owned businesses. Because of this, customers care about supplier diversification. A company’s attempts to fulfill commitments and uphold high moral and ethical standards include this as a crucial component.
Along with many positive effects for businesses, globalization has made it more challenging to hone their competitive advantages. Many businesses across all sectors have adopted a strategic supplier diversity certification to stand out from the competition.
But what exactly is supplier diversity certification, and why is it important? Let’s find out as we discuss supplier diversity certification in-depth.
What is supplier diversity certification?
Once a third-party certification body has verified, screened, and validated that your company is diverse, they will grant you a supplier diversity certification. This certification increases your chances of entering doors that might not be open to non-certified suppliers because it shows buyers that your company complies with the inclusion program guidelines.
These certifications are essential when attempting to partner with government organizations, some of which are required by law to source a specific proportion of their supply needs from recognized small or diverse-owned firms.
To be certified as a diverse supplier, you must present certain documents and meet certain criteria, including:
- S citizens must own the business
- At least 51% minority-owned, controlled, and operated
- The business must be located physically in the U.S. or one of its trust territories
- The business must be managed and operated every day by minority ownership member[s]
Types of diversity certification for suppliers
- Veteran Owned Small Business [VOSB]
- Historically Underutilized Business [HUB]
- LGBT Business Enterprise [LGBTBE]
- Small Business Enterprise [MBE]
- Disadvantaged Business Enterprise [DBE]
- Woman-Owned Small Business [WOSB]
Benefits of supplier diversity certification
A business can significantly benefit from having supplier diversity certification. These benefits include;
1. It promotes innovation
You run the danger of thwarting the creative benefits you should be getting if you consistently work with the same vendors without venturing into new, diversified industries. New small and medium-sized firms should be supported since they provide more innovation and set themselves apart from the competition.
Small businesses are nimbler and quicker to innovate than their larger competitors. Buyers should take advantage of this chance because, if they stick with their larger, more established suppliers, they won’t be exposed to the depth and breadth of innovation that comes from having a varied supply base.
Additionally, working with smaller firms gives you a greater chance to establish collaborative partnerships, allowing you to benefit from innovation and shape it as your relationship develops.
2. It helps to raise your corporate values
Companies are beginning to realize that diversity and inclusion are essential to the culture of business because of how the population is shifting. When your company can support a diverse business’s growth and success, it puts it in a very advantageous position. Your exposure grows as you attend industry events to look for potential new suppliers. One way to show your staff and clients that your business is sincere about diversity and inclusion is to have a supplier diversity program.
3. It provides new business opportunities
Businesses that take the time to carefully implement a supplier diversity program can open up a new market and gain new customers. Top corporate sellers are seeking a variety of companies. By becoming recognized, firms are added to a national database where clients frequently search for businesses that can support their diversity objectives while also serving their business needs.
For instance, many businesses can hugely benefit from vendor certification organizations such as the Women’s Business Enterprise National Council, which frequently hosts networking events and fosters business prospects between corporations searching for supplier diversity and “diverse businesses.”
4. Easy access to supplier diversity programs
Companies are now actively seeking out suppliers with diverse ownership. Some businesses have designed unique supplier diversity programs that foster connections with other diversely owned businesses, offer information sessions on how the business approaches procurement, and host educational events.
5. It helps to maintain a competitive advantage
Surely everyone wants to take a customer-focused approach? Coming in under budget and on schedule is the best approach to satisfy your decision-makers and keep the bottom line in check. They’ll go above and beyond to support your business growth and keep you satisfied because many suppliers are looking for new business opportunities.
Your request for quotations [RFQs] will rise dramatically if you promote your supplier diversity certification on your website and company profile. Your certifications should be presented with clear photos and be easy to find.
How to certify your business
Certifying your business is quite straightforward once you meet the mentioned criteria. The whole process can take some paperwork and time, usually anywhere from four to six months. Of course, it is very important to fully understand the requirements before you start certifying your business. This will help the process go as smoothly as possible. Additionally, it will speed up the process.
Following all the necessary procedures will provide a certification that has genuine value in the eyes of potential business partners due to the rigorous process’s assurance of high standards and confidence. If you want your business to promote innovative thinking, gain new business opportunities, and maintain a competitive advantage, you should acquire supplier diversity certification.