Supply chains for Diversity & Inclusion (at scale)

December 15, 2020

Supplier diversity programs are an often overlooked—and yet critical—way for businesses to achieve meaningful D&I impact

Last month, Apple took an industry-leading step with the hire of Barbara Whye as its Vice President of Inclusion and Diversity. Barbara Whye’s track record of success at Intel speaks for itself, as that company met and exceeded its D&I goals years ahead of schedule in an industry that has sometimes lagged behind its stated objectives with regards to its workforce.

This appointment provides the Fortune 500 and beyond with an opportunity to examine every aspect of its business when it comes to diversity and inclusion. That includes the ethnic, gender identification, and related identities of its workforces, but less obvious are those aspects that affect any company’s supply chain.

This is where Ms. Whye has a real opportunity to lead. Given Apple’s $36 billion in operating expenses, along with its $169 billion spend on cost of goods and services, its workforce is just one facet of its diversity. Its legendary supply chain is another, and perhaps the most important, measure of its D&I commitment. Its supply chain spend, after all, is a 5x expenditure compared to its headcount. 

No one knows this better than Tim Cook, who before taking over the CEO helm from legendary Steve Jobs long understood Apple’s purchasing power. Cook has already pledged $100 million to fight racial injustice—an admirable start—but it is a drop in the bucket in terms of what Apple, or any other global giant, can do in terms of operating at scale in a way that commits to diversity and inclusion via its supply chain.

Consider this: Apple shifts spend back to the US to local, diverse suppliers 

As Apple makes well-publicized moves to shift production outside of China, could—as a downstream effect—it also put more of its business in the hands of suppliers who are more diverse and inclusive than those it’s previously favored?

In a changing geopolitical climate, as companies like Apple start to shift production back to the US, could they leverage that movement to move more purchasing back to the local businesses, and even better yet, local diverse businesses, that feed into that supply chain? Doing so would contribute to economic development and prosperity in a way that no other D&I initiative could —as supporting diverse local businesses encourages the growth of underrepresented businesses and uplifts local communities, inspiring job creation, increased wages, and tax revenue. 

The benefits of diversity and inclusion reach beyond social responsibility

Moreover, the advantages for the company go far beyond making good on corporate commitments to social responsibility. Companies that diversify their supply chains are more agile and able to respond to changing market conditions and are able to capture more market share for a serious competitive advantage. It’s a win-win. 

Who will follow Apple’s diversity and inclusion foot steps? 

There are countless subsequent questions that can be asked—not just of Apple, but of the Fortune 500 and beyond as they seek to expand their previously held beliefs on diversity and inclusion.  

At Fairmarkit, we are seeing companies make D&I commitments with their wallets. Some are moving faster than others, and some (unfortunately) are just giving lip service to the movement. Regardless of what steps they’ve taken, or what commitments they’ve made, all companies today acknowledge the importance of impactful D&I. Apple is providing all of us with a light to shine on supply chains, as well as employee base, and we’re curious to see who follows.

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