Building a Diverse Supply Chain with Tier 2 Supplier Spending
At Legacy Logistics, supplier diversification plays an important role in our business. That’s because working with diverse business partners, including small-business enterprises (SBEs), minority-owned business enterprises (MBEs), veteran-owned, and women-owned businesses (WBENs), helps to strengthen our country’s supply chain. It also supports business diversity and sustainability efforts.
At Legacy, we provide our clients with Tier 2 Supplier Diversity spending opportunities. A diverse business is defined as being at least 51% owned and operated by an individual or group that is part of an underrepresented group. Supplier diversity programs help lower barriers of entry for groups historically underrepresented in key industries.
Many U.S. companies have made supplier diversity a priority, developing programs that support a strong and diverse supply chain. They foster entrepreneurship and business ownership within minority groups. For example, Coca-Cola set a goal in 2020 to spend over $1 billion annually on diverse supply partners. Target spends $1.4 billion through first-tier diverse suppliers and $800,000 on second tier diverse suppliers.
Supporting diversity throughout the supply chain has a direct impact on the U.S. economy, encouraging business growth throughout the country. These diverse business partners support their communities with jobs and tax revenue. Diversity also encourages competition, driving prices down, and innovation within business sectors up. Small businesses understand their local markets and offer personal service and high-quality customer service. In addition, customers who perceive a brand to be committed to diversity are three times more likely to purchase a brand’s products or services than those who do not.
Supporting Diversity with Tier 2 Supplier Spending
When it comes to supplier diversity, companies can effectively support minority-owned businesses through Tier 1 or Tier 2 supplier spending. Tier 1 Suppliers contract directly with companies to provide goods and services that support business operations. Offer a clear gauge of supplier diversity, they can be easily tracked as a percentage of the company’s supplier portfolio. Tier 2 Suppliers are companies or service providers contracted via a vendor. The products and services they provide are indirectly tied to a business and these suppliers can also play an important role in supporting a company’s supplier diversity program. In addition, more Tier 2 suppliers are now accepted by government contracts as an acceptable inclusion when measuring overall diverse spending. Supporting Tier 2 Suppliers allows direct, extensive, non-diverse suppliers to indirectly contribute to meeting supplier diversity requirements.
Legacy Logistics is Ready to Support Your Diversity Program
Legacy Logistics provides clients across the country with Tier 2 Supplier Diversity spending opportunities. In addition, we are committing to supporting diversity within our own supply chain, working closely with diverse business partners across the U.S. as we serve our clients.