Procurement without Bias: How CIBC Promotes and Provides Opportunities for Diverse Suppliers
Brought to you by WBR Insights
Supplier diversity programs are a hot topic right now. The most successful businesses have come to realize that by creating diversity in their supply chains, they can unlock innovation and agility, drive competitiveness, improve their ethical credentials, and enhance their reputation. Procurement plays a key role in diversification, responsible for creating the economic and moral value that will result from the opportunities a more flexible and more creative supply base brings.
However, supplier diversity programs are still few and far between - though recent research from strategic supplier diversity solution provider CVM indicates that this may be about to change. According to the company's 2019 State of Supplier Diversity: Supplier Diversity Programs report, 29% of organizations currently have a global supplier diversity program in place - up from 23% last year. Even more promising is the number of companies - particularly large organizations with 20,000+ employees - planning to implement a supplier diversity program in the next three years, which jumped from 28% in 2018's survey to 44% in 2019.
(Image source: cvmsolutions.com)
The growing commitment to supplier diversity programs is hardly surprising, given the benefits such programs can bring. These include: increased competition between current and potential vendors; the promotion of innovation through the entrance of new products, services, and solutions; the opening up of new channels through which goods and services can be procured; displaying the organization's commitment to doing business in diverse markets; and showcasing the company's interest in and commitment to the economic growth of all communities.
Due to these benefits, supplier diversity programs have a positive impact on a company's bottom line, too. As strategic sourcing, procuring, supplier management and supplier diversity expert Simona Rabsatt Butler points out in a recent interview with MediaVillage: "Ernst & Young shared a study where 54% of companies claimed a 'strong link' between supplier diversity and new business development," she said. "Companies with diverse partner business strategies claim around $3.6 million in re-investible funds for their company bottom lines for every $1 million spent in procurement costs. The return on cost (ROC) generated for procurement operations by diverse partners over average partner performers EY reported as 133%."
Undoubtedly, an effective supplier diversity process can have a powerful and positive impact on the strength and competitiveness of a company. But to implement a strong and successful program, organizations must create specific classifications and develop a robust selection process.
Canadian Imperial Bank of Canada (CIBC) knows this more than most and has developed a Supplier Inclusion and Diversity Program to ensure diversity continues to be built throughout its supply chain.
CIBC's Commitment to Diversifying Its Supply Chain
CIBC wants to do business with companies that reflect the clients and communities it serves, thereby driving value for all CIBC stakeholders. To substantiate this commitment, CIBC employs a fair and inclusive procurement program to select and manage supplier relationships.
"To support this, we are focused on promoting and providing opportunities for diverse suppliers, including enterprises that are owned and managed by women, indigenous peoples, veterans, people with disabilities, and visible minorities, as well as companies with a diverse workforce," writes CIBC. "One way we're working to build supplier diversity is through ongoing relationships with organizations that work in this area."
To help the bank reach and grow business with suppliers from diverse communities, CIBC is an active member of the following organizations and regularly participates in their supplier diversity events:
- Canadian Aboriginal and Minority Supplier Council: Certifies firms at least 51% owned and operated by indigenous peoples and visible minorities.
- Women Business Enterprise (WBE) Canada: Certifies firms at least 51% owned and operated by women.
- Canadian Gay & Lesbian Chamber of Commerce: Certifies firms at least 51% LGBT+ owned and operated.
- Canadian Council for Aboriginal Business: Certifies firms at least 51% owned and operated by indigenous peoples.
Speaking to WBE Canada, a spokesperson for CIBC said: "CIBC is very motivated to be a responsible and accountable member of the community, and supporting women in business and diverse suppliers is very much what we want to do. We are very happy and eager to be part of the organization and to meet diverse suppliers in our community."
Supplier diversity not only benefits suppliers but it also makes good strategic and financial sense for the company mandating the program. Many of the world's largest companies are investing in the power of minority-owned, women-owned, veteran-owned, and LGBT+-owned vendors, and it's great to see one of Canada's largest banks so heavily committed to realizing an increasingly diverse supplier base.
"We're working towards getting the message out to the broader community that it is important to hire and engage with diverse suppliers," said the CIBC spokesperson. "We hope as time progresses that it will become more and more important to large Canadian organizations to work with diverse companies."
You can hear CIBC's Sankar Pattabi, Senior Category Manager, Corporate Sourcing, speak at ProcureCon Canada 2020, taking place in May at the Marriott Toronto, CF Eaton Centre, ON.
Download the agenda today for more insights and information.