Understand why and how to diversify your supply chain

Ian Clarke

Article author

Reading time: 6 min

Last updated: August 15th, 2022

Understand why and how to diversify your supply chain

Are all your suppliers owned and led by similar people? Have you used the same supplier for years without progress? Then chances are your supply chain isn't that diverse. So what?

Change can be risky, costly and difficult. But Winston Churchill summed up why its worth it best when he said "to improve is to change; to be perfect is to change often. If the plan doesn't work, change the plan but never the goal".

Why is Supplier Diversity Important?

Today, Ethnically Marginalised Businesses (EMBs) represent nearly 16% of all registered businesses in the UK. 1 in 6 businesses - almost 1 million - are majority owned and/or led by people from marginalised ethnic communities. EMBs employee over 3 million people - 10% of the UK’s workforce - but attract less than 1% of corporate and public sector spending. 

By only channeling procurement wallets to - for example - only white male owned and led businesses - we are inadvertently fueling unsustainable inequality, stifling creativity and performance whilst driving up prices and potentially breaking the law.

But research by The Hackett Group shows a direct correlation between higher diverse supplier spending and improved market share, constituting a greater return on investment versus non-diverse supplier spending.

  • Impressively, 99% of EMB suppliers meet expectations, and almost 25% exceed expectations.

  • Up to 10% of sales come with supplier diversity requirements, showing that such programs can contribute to revenue.

  • Companies that allocate 20% or more of their spend to diverse suppliers can attribute 10%–15% of their annual sales to supplier diversity programs.

  • Companies with world-class procurement organizations devote 33% more of their spend to diverse suppliers, compared with the average company.

That's why more and more businesses are opening up their supply chains with dedicated teams, policies and budgets to attract more diverse owned and led suppliers - such as SME's, Women- or Non-White owned businesses. Not only are you doing the right thing, you also make more money this way. That's because you're introducing added price and innovation competition to your sourcing operations.

And it doesn't stop there. The higher 'economic impact' of underrepresented businesses means that any spend you make with them helps to uplift the communities where those businesses are located through job creation, improved living wages and additional tax revenues.

How are diverse owned/led businesses different?

Diverse businesses typically encounter additional barriers that challenge their startup and sustainability efforts, such as reduced access to capital and fewer opportunities to network.

For example, Deilight Consulting's Founder was uninvited from a keynote address at a major European conference on Women's rights in Finance earlier this year at the request of a major international bank and headline sponsor which took exception at his efforts to tackle racism in financial services.

Effective supplier diversity strategies can alleviate these pain points by counterweighting oppression against marginalised groups and helping to level the playing field into a more equitable, sustainable opportunity for new businesses to grow.

Where can I find more diverse suppliers?

  1. Join a Supplier Diversity Advocacy Network

    Deilight Consulting is a proud certified member of MSDUK - the UK and Europe’s leading supplier diversity advocacy network connecting 700 Ethnically Marginalised Businesses (EMBs) with 100 private and public sector procurement organisations. With events, awards, networking, tender support and best practice insights throughout the year, it's been worth every penny in helping to get our firm off the ground and into our clients thoughts.

    For more information on member benefits, costs or to sign up, visit https://www.msduk.org.uk/home.

    Other exceptional supplier networks we work with that offer free advice and support from within strong communities of change makers include: Women in Business Network (link, gender-lense focused), the Good Business Club (link, Social Enterprise focussed) and the Federation of Small Businesses (link, or contact Vaseem.Gill@fsb.org.uk).

  2. Attend a Supplier Diversity event

    Europe's largest supplier diversity event is back LIVE for 2022, providing Ethnically Marginalised Businesses (EMB's), corporate sourcing buyers, and supplier diversity professionals the chance to connect, network, learn and do business. The MSDUK Annual Business Show will take place in London on 9th September 2022 at the Queen Elizabeth II Conference Centre, Parliament Square, Westminster.

    Buying teams from 100 leading corporates representing all sectors, including headline sponsors EY, Accenture, Unilever and Bristol-Myers Squibb, will exhibit their needs alongside 700 sustainable, innovative, high growth EMB supplier businesses.

    Tickets are available now from https://www.msdukconference.co.uk/.

New firm, new ideas, new perspectives

At Deilight, we try to practice what we preach. That means supporting other EMB's in our network, through our own initiatives like the 'DEI in the Life' podcast and putting in a strong turnout at MSDUK events.

"As the only fully-integrated, full service Diversity & Inclusion consultancy exhibiting at MSDUK, we felt it was important to use the opportunity to do more than just sell our firm" said Ian Clarke, Founder of Deilight Consulting.

"That's why we're inviting all our fellow EMB's, Corporate Buying Teams and other attendees to stop by our stand to meet our Deilightful team of trail blazers and business leaders for complimentary Leadership Coaching, judgment-free Diversity & Inclusion troubleshooting and brainstorming on any complex strategic headwinds they might be facing. I'm fine if we don't sell anything - our order book is strong - our sole goal here is to help them thrive financially through difference."

Looking to diversify your suppliers?

Our consultants listen to your goals and then help you achieve them. That might mean assisting as you install more objective supplier engagement, selection and review processes, or identifying appropriate networks to help boost the levels of innovation in your procurement operations and beyond.

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