5 Supplier Diversity Myths Debunked

myths in procurement

Myths still exist and they are also widespread in the supply chain field. Nowadays, it is not the myths of creation or origins of a particular object but vague practices of people and organization that is steeped in myths. Even technology (in forms of devices and softwares) also suffer myths or misconceptions.

What does a myth do?

Myths are particularly harmless. However, they can have a negative effect that might hinder people in trying new things or activities. People will also hesitant to even try because a myth or unfounded belief can plant a notion in a person’s mind that can be difficult to dissuade. People might still consider themselves modern but there are times when our line of thought relies on an invariable claim.

Myths in Procurement and In Supplier Diversity

In a modern process like procurement, myths abound, particularly for novice entrepreneurs. For a novice business owner in the field of procurement, the concept and activity of procurement can be burdensome and confusing. In addition, searching for information about procurement (and other related areas) can confuse a newbie. This can also be applied to supplier diversity, a practice which encourages big companies or the government to accept products and services from disadvantaged small businesses owned by women, veterans, members of the ethnic group, disabled and others. Often, these businesses get a rare opportunity to create profit and maintain their business using procurement. This opportunity might be burdened or influenced by myths surrounding the practice of supplier diversity.

procurement and supplier diversity mythsIf you are a business owner new to procurement or a big business looking for supplier diversity as an option, here are some supplier diversity and procurement myths.

1. Supplier diversity is just a gimmick.

This claim is not true. A good business is run by a competent owner and manager, regardless of skin color, ethnicity, beliefs or other demographic feature. In supplier diversity, more businesses are given to smaller businesses because they are capable of delivering the best product or service. Supplier diversity should benefit both parties in many areas, not just as an ideal obligation of one party. In addition, supplier diversity delivers functional and definite results for both the vendor and client.

2. It is not an act or offer of charity.

Supplier diversity engages both the vendor and the buyer in the process. It is a cooperative effort and a symbiotic relationship. Both parties benefit from the process and the relationship.

3. Supplier diversity has no benefits (or its benefits are one-sided).

This myth assumes that supplier diversity has nothing or less than to offer compared to other forms of business. In today’s rapidly globalized world, being resistant to trends like supplier diversity can cause the company loss of profit and loss of opportunity. Having a variety of people from different background and attributes (lifestyle, perspective, beliefs, values and priorities) can help gain and understand new customers and a new market. Employing a diverse supplier list also help influence future clients and consumers. Every entity’s role can change and switch in any situation. Supplier diversity offers a new opportunity for business to grow.

4. Bigger is always better.

In recent years, running a smaller business is better compared to a bigger one. Running a large company can induce more resources and more costs without giving guarantee in terms of efficiency, productivity, performance and output. Although a big company is the entity that practices supplier diversity more, it doesn’t mean that the company itself is productive and practicing effective methods. The same can be said for being a global company. Small businesses that engage in supplier diversity bring the expertise, trust and the uniqueness of the community where they belong.

5. Supplier diversity brings unqualified suppliers.

Being open to a lot of suppliers can overwhelm a company, much lest the question and process of selecting the best supplier for the job. Supplier diversity can come with unqualified suppliers. It can also with accredited suppliers. In any trend, there will be good and bad sort of companies. It is the responsibility of the company that assumes the buyer role that their vendors/suppliers are the best for their needs. In any case, it is the prerogative and the decision of any company to pursue a supplier diversity program, set their own goals and evaluate the suppliers who want to engage in the program.

Supplier diversity is one good program or policy that can be adopted by any company. It has its own risks and opportunities; strengths and weaknesses. Separating the fact from the myths stated above can help in making a good decision.

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