February 24, 2023 – Since the pandemic, supply chain strategies have become top-of-mind for executives across business functions. A recent survey by HealthTrust Performance GroupSM showed that an overwhelming 85% of respondents, who are owners and operators of healthcare systems across the U.S., are now taking a more proactive approach to ensure stable supply chains for their organizations.
One key proactive supply chain strategy is supplier diversity – The use of minority, woman and service-disabled veteran enterprises (MWSDVEs) to provide goods and services to hospitals and non-acute healthcare settings. For providers, supplier diversity has clear operational and supply chain benefits.
An increasing number of organizations are embracing diversity, equity and inclusion (DEI) as critical and integral components of their corporate culture. Taking steps to diversify the supplier base can help hospitals and healthcare providers meet these broader goals.
Diverse suppliers, which are often smaller companies, can also become more ingrained in the businesses they serve. They grow to know their clients’ organizations as if they were their own. As a result, over time, these suppliers can both identify opportunities for innovation and/or business efficiencies and help implement these changes. This might include finding new ways to use everyday products, upgrading technology, or automating processes. These recommendations can strengthen business operations and set new standards for reliable service.
Diversifying the supplier base can also provide other benefits. MWSDVEs are generally more responsive, provide higher quality of service, and nurture more personalized connections. Overall, these practices foster and strengthen ties across local communities. Particularly for healthcare organizations serving local regions, growing community connection points foster trust and improve the quality of care they are able to provide to patients.
Healthcare organizations that have diversity programs in place and relationships with diverse suppliers, tend to be more profitable. Companies in the bottom quartile for gender, ethnic, and cultural diversity were less likely to achieve above-average profitability, according to a study of diversity in the workplace by McKinsey & Company. Similarly, The National Minority Supplier Diversity Council reports that certified minority business enterprises generate $400 billion in economic output, leading to the creation or preservation of 2.2 million jobs and $49 billion in annual revenue for local, state and federal tax authorities. These numbers are steadily increasing.
Read more from the latest issue of The Journal of Healthcare Contracting.