Diversity Sourcing: Should it Matter?

Call me a diversity sourcing cynic, but I could care less who Ford is sourcing from, unless they're on the denied party list. In the long-term, what should matter most to Ford -- and shareholders -- is whether Ford is sourcing at the lowest total cost. In the current complex automotive sourcing environment where rising category prices and supplier bankruptcies are becoming the norm and not the exception, issuing press releases about the percentage of spend going to special interest suppliers is a downright lame attempt to accentuate the positive.

The firm my wife started is a certified woman owned business. Even though they have never used the designation to win business, both of us know exactly how to use such an approach to take title to products for the sake of "pumping up" a companies business with diversity suppliers rather than just serving as a consultant or advisor who facilitates a transaction. We know this sort of perfectly legal behavior happens everyday. And we also know that it is an unfair advantage in the sales process which adds no value (on a total cost basis) to buying organizations.

But back to the issue at hand -- you can't entirely blame Ford for playing the diversity card. The US government (which both indirectly and directly requires such diversity reporting for large organizations that supply to Federal departments and agencies) is the real scapegoat. In my view, this needs to change. On a globally competitive stage, the Federal government should focus on helping US companies become more competitive rather than requiring them to count various doll-outs to special interest groups (which at worst, were awarded for the wrong reasons, and at best, added unnecessary margin into a purchase price). I believe that diversity sourcing programs are a holdover from an era that we can no longer afford to let our hearts bleed for (even if they were well intentioned to begin with). Think about all the time and dollars that are wasted on analyzing and reporting on minority spending which could be better spent on things like lean training and job skills development (for those who need it most).

Jason Busch

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