Supply Chain Diversity vs Supplier Diversity


If you’re here, you’re likely wondering what the difference is between ‘supply chain diversity’ and ‘supplier diversity’ – two terms that we often seen used interchangeably, despite meaning two rather separate things! Nonetheless, both are important aspects of building a risk-savvy and forward-thinking supply chain that can support the growth of your business.

What is Supply Chain Diversity?

Supply chain diversity refers to the expansion of an organisation’s supply chain network – utilising a more diverse range of suppliers rather than a small network of them. To many organisations, the concept of supply chain diversity goes against previous procurement ‘best-practices’, in which a smaller base of suppliers facilitated more personal inter-party relationships. However, in a global age whereby supply chains can be impacted by macro factors from across the globe, supply chain diversification helps to protect the ongoing functionality of business supply chains. In fact, a Deloitte survey (Global CPO Survey 2019) revealed that 67% of top CPOs have already implemented supplier diversification strategies into their IT procurement systems.


Benefits of Supply Chain Diversity

·  Reduced risk: supply chain diversity reduces organisational reliance on a single or small number of suppliers, helping to prevent disruptions to business activities if a supplier is unable to deliver on an order

·  Access to more talent: by increasing the number of suppliers that businesses are working with, organisations have access to a wider pool of talent and innovation

·  Enhanced supplier performance: supply chain diversity programs make individual suppliers more expendable as organisations are not reliant on a single supplier. The result of this is more pressure on the supplier to conform with contract compliance and increase their performance in order to retain contracts.

·  More cost-leverage: supply chain diversity also increases competition between suppliers. This not only improves performance, but also helps businesses to gain greater cost-leverage over suppliers, able to negotiate more competitive rates.

·  Better responsiveness: supply chain diversity allows for greater supply chain flexibility; in turn, this allows organisations to respond to macro factors such as changing market trend sand customer demands at a faster rate, and provide a higher quality service through strategic decision-making.


What is Supplier Diversity?

Supplier diversity refers to the use of a more diverse range of suppliers from across the globe, with organisations proactively seeking smaller and often minority-owned businesses. The importance of a supplier diversity strategy has grown in recent years in conjunction with many global movements such as #MeToo and Black Lives Matter, with a recent Hackett Group Survey (2021) revealing that 77% of organisations are planning an increased spend with black-owned businesses.

Supplier diversity can be an important part of a company’s ethical and social justice efforts, signalling to consumers that they’re taking an active role supporting diversity and social responsibility. Nonetheless, supplier diversity programs can also offer a host of other benefits to businesses.

Benefits of Supplier Diversity

 · Attract fresh talent: by widening the pool of vendors that organisations are looking to procure from, businesses increase the chances of sourcing new, fresh talent – talent which has not already been utilised by their competitors or other market-leaders. In turn, this can help to improve competitive advantage by increasing innovative thinking within the organisation.

· Appeal to new demographics: According to The Census Bureau minorities will account for nearly 90% of the total growth in the U.S. population between1995 and 2050. Likewise, the buying power of such minority groups is projected to be around $3.9 trillion by 2030 and as such, businesses should not disregard the importance of appealing to such groups if they wish to ensure the future progression of their organisation. A diverse supply base can help to align organisations with new demographics, increasing their potential customer base.

·  Increase profits: Inline with the above, a supplier diversity strategy can help to increase profits through increasing the customer base. In the US, women make up between 70% and80% of all consumer spending. Unsurprisingly, women-owned business is now the top diverse category in all regions across the US, as businesses grapple to take advantage of the potential consumer base attained through working with women-owned businesses.

Get Help From our Experts

Looking to consult a procurement expert? Look no further. At Athena Commercial we offer procurement consulting and software solutions across a diverse range of areas. With specialists in all areas of procurement we have the skills and expertise to guide you through the procurement process, including devising a supplier diversity program or a supply chain diversity strategy for your next business.

Get in touch for more information today at

Related posts
No items found.

Get in touch!

Contact us today to learn how can help you reduce your costs and free up your time.
Get in Touch
Get in Touch