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Supply Chain Organizations Need to Work on their DEI Initiatives

April 7, 2021
A new report from the Association for Supply Chain Management (ASCM) and Gartner highlights the gaps in diversity, equity and inclusion for supply chain organizations.

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Last year marked a turning point for companies in recognizing that a lack of diversity, equity, and inclusion (DEI) focus can cost talent, customers and investors. According to a new report from the Association for Supply Chain Management (ASCM) and Gartner, there’s still much work to be done in this area, despite the progress that may have taken place over the last year.

In their Supply Chain Diversity, Equity, and Inclusion in 2021 report, the groups say that:

  • 62% of supply chain organizations are looking at the dimensions of ethnicity/race as part of their recruitment strategies.
  • 30% of the full-time supply chain workforce are people of color, but only 9% of supply chain VPs are people of color.
  • 41% of supply chain organizations have no plans to improve DEI.
  • Most DEI initiatives in place at supply chain organizations prioritize education and awareness raising (30%), followed by recruiting (20%) and integrated pipeline planning (20%).

What’s a Diverse Supply Chain?

In assessing what diverse, equitable and inclusive supply chain teams actually look like, and what DEI supply chain cultures feel like, Gartner and ASCM say that a diverse supply chain organization values an individual’s seen and unseen differences (e.g., whether they are of different ethnic/racial heritages or are part of the LGBTQ+ community).

“Equity provides employees with a fair shot at opportunities and fairness in terms of compensation,” they state in the report. And, inclusion is about being part of the organization, being able to contribute and being heard.

“Diversity, equity and inclusion are mutually supporting concepts,” the groups state, noting that one without the other may lead to short-term gains, but these gains will not be sustained. For example, a supply chain organization can recruit racially diverse candidates; however, if these candidates are not included in key decisions as they relate to the role or given equitable opportunity and compensation, they will leave.

Gartner and ASCM caution companies to remember that diversity is just one dimension of DEI. “Diversity cannot be achieved or sustained without creating an equitable and inclusive employee experience,” they say.

No Plans in Place

More than half of supply chain organizations have some form of objective to improve DEI, and 23% of those organizations have formal targets and goals that are represented on management scorecards, according to Gartner and ASCM. However, on the other hand, about three out of every seven supply chain organizations have no plans to improve DEI.

For the 44% of supply chain organizations that don’t have an initiative or are just now “considering” starting one, Gartner and ASCM say there are clear reasons to put more emphasis on DEI in 2021 (and beyond).

“Supply chain organizations with [DEI] initiatives were 66% more likely to report progress in meeting their diversity goals,” they say, “and nearly two times more likely to meet their equity goals than respondents without targeted initiatives. To ensure that goals and objectives don’t get stranded without action, identify and resource specific projects and initiatives that supply chain can drive, lead, or influence.”

Leading the Pack

According to the report, consumer and retail organizations are more likely than other industry sectors to either have a general objective for DEI or formal targets or goals. Company size also plays a role when it comes to the dedication of senior leadership to improve DEI. The largest supply chain organizations are far more likely to have DEI objectives and formal plans in place versus their peers (only 24% of small business supply chains have improved DEI as an objective).

“This makes sense when you look at the social justice movements of 2020. The largest global companies have globally recognizable brands, so they were under a lot of pressure to take action,” said Dana Stiffler, VP analyst with the Gartner Supply Chain Practice, in a press release.

“In a global organization, it’s more likely they’ll have a DEI officer or an HR leader that owns and cascades the DEI strategy,” Stiffler continues. “Where this is not happening fast enough, some chief supply chain officers (CSCOs) have designed and launched their own initiatives.”

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About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.