By Mark Thill
A report that came across my desk this fall is valuable reading for supply chain executives. It is “Increasing Supplier Diversity in Health Care,” by the Health Research & Education Trust (HRET), in partnership with the American Hospital Association. It’s well-written, easy to understand, and brief (19 pages, including end notes, additional resources, etc.)
The document:
- Defines supplier diversity.
- Spells out the rationale for diversity, as well as its benefits to the hospital or IDN.
- Offers resources that can help providers identify diverse suppliers.
- Offers action steps to get started.
- Presents several real-life case studies.
Supplier diversity defined
The document says, “Supplier diversity is present when an organization’s contracts for goods and services feature a variety of businesses, including those that are at least 51 percent owned, managed and operated by minorities, women or veterans; those located in a historically underutilized business zone (HUBZone); or small disadvantaged businesses as defined by the U.S. Small Business Administration.”
Rationale, benefits
Why diversity? The U.S. Census Bureau estimates that racial and ethnic minority groups will compose a majority of the U.S. population by 2042, the authors point out. By 2023, minority children will constitute the majority of U.S. children. “As demographics change, diverse suppliers are able to provide new products and services. Many minority- and women-owned businesses operate in neighborhoods that benefit significantly from the employment and economic growth that diverse businesses provide.”
HRET lists some of the benefits of supplier diversity, elaborated upon in several case studies:
- Greater innovation and value through cost reductions; better contract terms and conditions and improved service
- Expansion of external partnerships – often nontraditional – in the community
- Local job creation and other community benefits.
- Supplier roster that mirrors the patient and community populations.
Action steps
Healthcare organizations should consider taking the following steps to increase supplier diversity, according to HRET:
- Define goals for a supplier diversity program and draft a clear mission statement. Create a code of conduct that ensures fair access to all suppliers.
- Incorporate these goals into the hospital’s or health system’s strategic plan and include specific targets for diversity spending. Frame supplier diversity goals as strategic and business imperatives, rather than simply “the right thing to do.”
- Communicate with your group purchasing organization to ensure its practices reflect your hospital’s goals.
- Consider opportunities to diversify other hospital contracts, such as those for advertising and marketing.
- Ensure that at least one minority candidate is always considered for a supplier position.
- Appoint a champion within the organization who will be accountable for implementing supplier diversity and tracking performance goals and dollars spent on diverse suppliers.
- Cultivate relationships with diverse suppliers through favorable financial terms, technical and managerial services and educational seminars.
- If your hospital or health system isn’t doing so already, consider working with a group purchasing organization to gain access to a wide network of diverse suppliers.
- Avoid framing the supplier diversity program as a quota system or social program. Instead, emphasize its importance as a business strategy that will provide a competitive advantage to the organization.
Perhaps the best parts of the HRET document are the case studies: CHRISTUS Health, Grady Health System, Greenville Health System, Saint Francis Care, and University of Chicago Medicine. Their stories are laid out, and contact information given.
It’s a great resource, and it’s free at www.hope.org/supplierdiversity.
