The association between supplier diversity and Fortune 1000 companies
Each year, Fortune Magazine publishes a list of the top 1000 publicly traded American companies based on revenue. The companies’ chief business operations, discounted functions, and consolidated territories’ operations are reviewed to analyze their economic infrastructure. Recently, supplier diversity has become an instrumental component of the business functions of these Fortune 1000 companies.
The pros of supplier diversity
According to research, these companies are doubling their supplier diversity spending and initiatives which results in a significant economic influence worth billions of dollars. The improved adaptability and sustainable practices enable a business to realize this financial outcome. A diversified supply chain means companies are working with a plethora of talented individuals who bring a fresh perspective to business operations. Resultantly, the Fortune 1000 companies expanded their consumer base to a varied audience as the range of the products caters to the needs of a wider client segmentation. On the other hand, to enjoy these benefits of supplied diversity the companies modify their operational processes in the following ways.
Promoting sustainable practices
Supply chain sustainability is a major topic of conversation for Fortune 1000 companies, especially during the pandemic. On this account, the Fortune 1000 companies have incorporated supplier diversity into their supply chain to add more value. The Hackett Group has predicted a 50% surge in the supplier diversity of the Fortune 1000 companies by the year 2025. A diversified supply chain is now recognized as a best practice for business and federal contracts.
Equivalent economics status
The executive suite of Global Supply Diversity regards the diversified supply chain to be an essential component of the economic status of the individuals in the society. Owing to this, the Fortune 1000 companies specifically denote the positive economic impact of their supplier diversity on society. Many of the companies included in this Fortune 1000 list have doubled their supplier diversity spending initiatives, and this has greatly impacted our economy. Minority Business Enterprises (MBEs) significantly contribute to our economic landscape. According to the National Minority Supplier Development Council, MBEs:
- Generated more than $400 billion in economic output
- Created 2.2 million jobs
- Contributed $49 billion in revenue to local, state, and federal tax authorities
It depicts that the Fortune 1000 companies’ prime concern should not only be their financial status, but the financial status of society as well. This way, these organizations portray their considerable impact on the global communities’ consumers which, in the long run, revamps their value chain.
Fortune 1000 companies address the need of a broad range of audiences because of the diversity of their products and services. Similarly, Fortune 1000 companies relish fresh talent to soar their consumers’ satisfaction rate. Having a diverse supply chain is beneficial because companies have relationships with a plethora of talented people, and this results in different perspectives and viewpoints having a seat at the table. These suppliers help companies from remaining stagnant. According to research published in the Graziadio Business Review, sourcing from minority business owners gives companies the opportunity to gain a competitive advantage by diversifying their suppliers. They’re able to establish relationships with key players in the market space, and customers tend to favor businesses that implement supplier diversity programs. This leads to increased brand loyalty and increased profits because customers are spending more since they align with the companies’ missions. It shows that employing suppliers is a crucial characteristic pertinent to Fortune 1000 companies.
This research reflects the positive association between the Fortune 1000 companies and their diversified supply chains. All of the formerly highlighted instances advocate for the need of supplier diversity in Fortune 1000 companies.
For more information on Supplier Diversity, please contact our Vice President of Marketing & Supplier Diversity, Stephanie Armstrong: [email protected]