Inclusive Procurement

Inclusive procurement is a positive business process that supports the purchase of goods or services from minority-owned and historically underutilized groups in order to advance social and economic development. These underutilized groups include Women; LGBTQ+ and people with disabilities. Inclusive procurement is the process of diversifying a company’s supply chain. Supplier diversity programs can be a crucial way to combat social injustice.

Inclusive procurement delivers broad societal benefits by generating an economic opportunity for disadvantaged communities. With the scarcity of resources and the economic and social challenges faced, inclusive procurement helps lead to economic efficiency through utilizing minority, underrepresented and underutilized groups. These are groups like small-business enterprises (SBEs), minority-owned enterprises (MBEs), and women-owned enterprises (WBEs). By diversifying suppliers and promoting competition, there is a better chance of advancing social equity, creating new jobs and for the organization to be a reflection of the customers it serves and the community it is situated in. It also helps achieve cost efficiency. As well, by adopting the inclusive procurement approach, there is an increased business consciousness of social issues that affect everyone in the community. It shows that an organization cares about everyone in the community, not just its employees.

Aside from the moral and ethical standards that are sound and viable commercial reasons for diversifying strategic suppliers, and inclusive procurement strategy helps widen the pool of potential suppliers and promotes competition in the supply base. This can improve the quality of products and reduce costs. By providing more sourcing options, inclusive procurement can make supply chains more resilient, which is an increasingly important advantage in these uncertain times. Diverse suppliers are also more flexible.

It is important to maintain transparency and fairness while targeted procurement is being carried out. The procurement process needs to be friendly and with no barriers to tendering. Opportunities are provided to all regardless of size. If leveraged effectively through the diversification of suppliers, supply chain dynamics could then advance social equity, environmental sustainability, and financial success of the organization itself. The suppliers that an organization decides to go with will determine its ability to deal with issues of cutting carbon emissions and wastes, supporting quality education and learning, reducing inequalities across gender, disabilities, sexualities, and race (Jones).

The risk of not adopting the inclusive procurement strategy is ending up with inefficient, high-priced strict supply chains that lack competition and innovation. As a result, organizations could end up being out of touch with the demand of their customers. Businesses that don’t take an inclusive approach to procurement could end up with a supply chain that cannot handle problem-solving, presenting: inefficiencies, high costs, reactionary responses, lacking finesse and entrepreneurial spirit.

– Shirin Mandani, CEO, GrantX Inc.