Supplier Diversity: Reverse Sourcing Discrimination?

Over at E-Sourcing Forum, David Bush breaks the news of a recent Hackett Group report that finds that "Companies wanting to expand their supplier diversity programs can do so without sacrificing savings". Even though I won't dive deep today into the economic arguments about whether or not the societal costs of supplier diversity programs outweigh the benefits, I find it abhorrent that no one else has raised the red flag over the dangerous slope that introducing minority status into the contracting practice can bring.

Let's examine the argument in David's post and linked headline for a minute. I'd argue this logic flow is an equivocation that takes the belief that since "World Class" companies are not spending more in aggregate considering their use of diversity suppliers, that they're not sacrificing potential savings by considering diversity as a factor in the first place. In my book this type of argument is PC sourcing hogwash. We all know that if a research study asked the question set a different way and looked at the data based specifically on savings sacrificed -- and supply bases narrowed -- based on set-asides as determined from an initial sourcing strategy, you might get very different result. Moreover, I believe the results of the referenced study are inconclusive (e.g., are the results causal or correlated? Are "World Class" companies just good at diversity sourcing because they're leaders across the board in general sourcing areas?)

Enough of the economic argument and shooting the study logic in the foot. That's less important, anyway. Rather, let's examine the logic behind a line of thinking that is treated as scripture and rarely questioned. In my world, the more important point here is that by considering diversity as a factor in supplier selection, we are creating an exclusive environment that discriminates against others. How, you ask? Explain to me the "societal" benefits of awarding a contract to a small "minority" owned business versus to a white business owner with a horrible stutter and one leg who had to max his credits cards just to get off the ground. What makes one person less appropriate than the other to receive a contract? Heck, it's actually legal to discriminate against the stammering, white-trash-raised, one-legged man, but if you ignore the "minority" supplier whose parents may or may not have been doctors or business owners, you might get a Jessie Jackson Push Coalition led protest outside your door (not to mention fewer government contracts for not agreeing to allocate a certain percentage of spend based on race and gender).

Seriously, if looked at from this vantage point, how can you tell me that "supplier diversity" is anything but legal -- heck, government mandated -- discrimination in favor of one party over an other. Perhaps just as California and Michigan struck down discriminatory affirmative action policies in higher education, we'll see similar moves in the government and private sector contracting realms in the future, eliminating race and gender as a legal factor to even consider in sourcing. And then I won't be the only voice of dissension for a practice that hurts just as many -- if not more -- than it helps through legal discrimination. Curious to learn more? Read a previous post on the subject here.

Jason Busch

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