What is supplier diversity spend?

What is supplier diversity spend?

What is Diverse Supplier Spend? Diverse supplier spend, often shortened to diverse spend, refers to the procurement dollars spent solely with small and diverse businesses, often expressed in a dollar amount or percentage of total procurement spend.

What is the difference between tier 1 and Tier 2 diversity spend?

Tier-1 Tier-2 Supplier Diversity Spend Tier-1 suppliers, also known as prime suppliers, are those businesses that directly sell products and services to a buyer, while tier-2 provide tier-1 suppliers with the products and/or services that are sold to that buyer.

How can you increase your diverse supplier spending?

1. 5 Ways to Increase the Number of Your Diverse Suppliers.
2. Requesting your prime suppliers to report their diverse spend.
3. Partner with Certifying Organizations.
4. Stage Your Own Diverse Supplier Events.
5. Develop Your Own Supplier Base.
6. Understand the Supplier Needs within Your Company.

How is supplier diversity measured?

The economic impact of supplier diversity can be measured with three metrics: direct impact, indirect impact and induced impact. Each metric provides insights into how much of an impact supplier diversity has had across the entire supply chain.

What is supplier diversification?

Supplier diversification is a tactic used to mitigate risk in a supply chain. It’s the primary, and perhaps the most effective, way to mature your supply chain and hedge it against risk.

What is a Tier 1 supplier vs Tier 2?

Tier 1 & Tier 2 suppliers refer primarily to suppliers of the automotive industry. A Tier 1 supplier supplies products (usually parts) directly to an OEM (What is an OEM?). The difference, then, is that a Tier 2 supplier supplies products to a Tier 1 supplier (who then supplies the parts to an OEM).

What are tier 1 Tier 2 and Tier 3 suppliers?

What Is Supplier Tiering?

• Tier 1: Direct partners that help you assemble the end product.
• Tier 2: Sub-suppliers to your Tier 1 partners (parts, components, and so forth)
• Tier 3: Parts or raw materials suppliers.

How do you diversify a supplier base?

4 Ways to Build a More Diverse Supplier Base

1. Utilize an e-procurement platform with diverse suppliers.
2. Partner with supplier diversity organizations.
3. Publicize your supplier diversity efforts.
4. Leverage your existing supplier relationships.

Why is supplier diversity important in business?

A supplier diversity commitment benefits a company because it: Promotes innovation through the introduction of new products, services, and solutions. Provides multiple channels from which to procure goods and services. Drives competition (on price and service levels) between the company’s existing and potential vendors.