What Is A Supplier Diversity Certification And What Are The Business Benefits

Implementing a supplier diversity program has evolved into a must-have in many U.S. companies. More stakeholders and policy makers are increasingly seeking out minority-owned, disadvantaged and small businesses. Companies that have long-standing relationships with reliable suppliers are seeing the benefits of diversity programs — and it’s making a significant impact in supply chain.


What Is A Supplier Diversity Certification?

A supplier diversity certification occurs when a third party certification agency documents, screens, and validates a business to verify that the company is diverse. Just like quality certifications, a supplier diversity certification matters to your customers. It lets them know you meet their standards and portray a value of trust — and is more than just about race. Supplier diversity includes gender and age diversity as well. To obtain a certification, documents are required and specific criteria need to be met like:

  • Owned by U.S. citizens
  • At least 51% minority-owned, operated, and controlled
  • Physically located in the U.S. or one of its trust territories
  • Must be operated and managed daily by minority ownership member(s)

The Supplier Diversity resource on Thomasnet.com provides clearer access and more opportunities for Diverse Suppliers to be found by organizations looking for women owned, minority owned, veteran owned, or small disadvantaged business owners.

Top 5 Benefits Of Supplier Diversity

Some businesses will only contract with those that are certified. So if you’re teetering on whether to put a program in place, looking to understand the positive repercussions, or hoping to convince your team to carry one out, take a look at the key benefits below.

1. Supplier Diversity Encourages Innovative Thinking

Manufacturers supplying the U.S. federal government know that diverse supply chains aren’t optional — there are many restrictions and requirements for meeting quotas, but that hasn’t stopped Lockheed Martin. In fact, the director of corporate agreements and supplier diversity told Industry Week that “these small businesses do [really] bring innovation to our corporation in a much faster method to market than a real large corporation like Lockheed Martin might be able to do.” 

2. Supplier Diversity Makes Room for More Business

And keep in mind that Lockheed Martin (or any company working with DoD or government contracts) has strict diversity requirements. By voluntarily implementing a supplier diversity program, you reap the benefits of setting up for success in the long run. DoD awards specific recipients in diverse programs like the following: 

  • Small Disadvantaged Business Concern
  • Women Owned Small Business
  • Service Disabled Veteran
  • Certified 8(a) Firm
  • Indian Incentive Program

Case Study: How Corrugated Metals Won Their First Contract With The Defense Industry

3. Supplier Diversity Maintains a Competitive Advantage

We all want a customer-focused approach, right? There’s no better way to keep the bottom line in check and your decision makers happy than to come in under budget and on time. With so many suppliers hungry for new partnerships, they’ll do what it takes to help you grow your business and keep you happy. 

A supplier diversity certification marketed on your website and Thomasnet.com company profile will significantly increase your RFQs. Your certifications should be easy to find and published with high-quality images. 

Here are some of the diversity certifications you can list on your Thomasnet.com profile:

  • African American
  • Asian-Pacific American
  • Asian-Indian American
  • Native American
  • Service Disabled Veteran
  • Veteran
  • Woman
  • HUBzone
  • SBA 8(a)
  • Hispanic American
  • LGBTQ+

4. Supplier Diversity Helps You Embrace Business Flexibility

When you partner with diverse small businesses, it tends to cut out the red tape associated with larger corporations — especially when it comes to some critical decisions that could take a big business months to figure out, a small business could solve in an hour. They also tend to be more open to requests — need an additional 10,000-piece run by next Tuesday? No problem.

5. Supplier Diversity Creates Growth Opportunities For The Community

When you hire a local small business or a minority-owned facility, you’re impacting a community. By working with those looking for new challenges and bigger opportunities, you’re creating a ripple in building and supporting the employees and local economies. When these types of organizations see success, jobs are created and tax revenue benefits, which develops and empowers communities — supplier diversity simply encourages growth in the U.S. economy.

Another Angle To Benefit Your Community: Addressing The Manufacturing Skills Gap And The Other Top 3 U.S. Manufacturing Challenges

CVS Health's commitment to supplier diversity triggered a multiplier effect that supports additional jobs in its supply chain and the suppliers’ communities. According to their Supplier Diversity Impact Report, their engagement with small and diverse businesses led to over $5.5 billion in contributions to the U.S. economy and sustained 31,095 U.S. jobs in 2018.

Promote Your Business Better With Certifications

Certifications give you an increased opportunity for organizations to find and hire your company. For those procurement and supply chain professionals looking for more diverse suppliers, you don’t have to sift through multiple sources to find companies. Start your search on Thomasnet.com’s free supplier diversity platform, which includes thousands of commercial and industrial suppliers with minority-owned, disadvantaged and small business specifiers with their certificates. If you're a procurement professional searching on behalf of a manufacturer, list your certified business on Thomasnet.com for free. Or if you're already listed on Thomasnet.com don't forget to add your certifications to your company profile. Certifications and Verified Supplier Badges on an RFQ page has shown to increase submission by more than 90%. 

Here are additional resources for industrial companies on diversity and inclusion:

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