Supplier Diversity Index
Category: Strategic
Measures the degree to which an organization works with a diverse range of suppliers, including minority-owned, women-owned, or small businesses.
What it Measures ?
How much we spend with suppliers from diverse or underrepresented groups.
Relevant StakeHolders
Diversity Officers, Procurement Managers
Why it Matters ?
Promotes diversity and inclusivity in supplier base.
In-depth Use Case / Real-world Example
A company focused on increasing supplier diversity tracks the number of contracts awarded to suppliers from diverse backgrounds. For example, if 20% of the company's suppliers are small businesses or minority-owned, the Supplier Diversity Index would be 20%. This index helps ensure that procurement supports a wide range of suppliers, promoting inclusivity, fostering innovation, and expanding market reach.
Sample Formula
(Diverse Suppliers Spend / Total Spend) * 100