In the modern world, social procurement and supplier diversity go hand in hand, and both are crucial to operating a socially responsible business. While that may seem like an unnecessary goal, the fact is that consumers are becoming increasingly aware of social and environmental concerns. So, diversifying your supply chain today can ensure your profitability for years to come.
Read on for five more benefits of supply chain diversity.
When suppliers compete for market share, they are forced to innovate, which is the best possible result for your business and your industry. By exploring your options and seeking new suppliers who can improve your products and align with your values, you contribute to developing more efficient and effective products. This allows you to serve your customers better while rewarding suppliers who work hard to produce ethical, high-quality deliverables.
Supply chain diversity can give you a competitive edge on many different fronts. Here, we’ll discuss the two most important ones: consistency and innovation.
Building on the point above, when you drive innovation through supply chain diversity, you gain a competitive advantage by ensuring you have access to the most cutting-edge offerings in your industry.
Supply chain diversity can also help you ensure you can always keep up with customer demand. If, for example, one of your suppliers cannot meet your growing needs, having viable alternative suppliers on-call will ensure you never have to make your customers wait.
Small businesses are central to the health of the economy in which your business resides. So, if you want to improve your profitability, it pays to do whatever you can to ensure the small businesses around you also thrive. Supply chain diversity is a fantastic way to achieve this goal.
By connecting with local businesses that can meet some of your demands, you can inject money into the local economy and reap several other benefits. For example, using local suppliers reduces transit times, saving you time and money while reducing your carbon footprint. Teaming up with local suppliers also gives you plenty of opportunities for cross-promotion and other initiatives.
When you work with a diverse supplier base, you put yourself in a strong position to ensure the cost of your supplies remains competitive. In fact, supplier diversity programs have been shown to reduce operational costs for most businesses that enact them. By reducing your operating costs in this way, you’ll have more capital to invest in growing your business and, potentially, expanding into new markets.
Not only will supply chain diversity give you the capital to fund expansion, but it will also make that expansion far more streamlined. By expanding your search for suppliers into new geographical regions, for example, you also open up those regions as viable markets in which to sell your products or services. Generally speaking, the wider you spread your net, the more opportunities you’ll find for growth. Just be sure to vet each potential supplier carefully to ensure they align with your vision and values.
With the above benefits in mind, why not make an effort to create a more diverse and socially responsible supply chain for your business? You’ll help your customers, support ethical companies, and boost your bottom line. So, there’s little to lose and an abundance of advantages to gain.