In today’s volatile manufacturing supply chain landscape, supplier diversity is no longer just a corporate social responsibility initiative—it’s a strategic imperative.
Given the complexity and size of many manufacturing supply chains, identifying and growing with small and diverse suppliers is critical.
As Ford’s head of supplier diversity, Travis Spencer, emphasized during a recent webinar, “Diversity in thought, development, and implementation breeds stronger products.” This statement underpins a growing recognition across the industry: diverse supply chains are a competitive advantage, and ignoring their potential is no longer an option.
Understanding the State of Supplier Diversity in Manufacturing
Supplier diversity has been a core part of most manufacturing supply chains for decades now. Companies like Ford have paved the way with supplier diversity programs dating back over 50 years, evolving from minority-focused initiatives to encompassing small, women-owned, veteran-owned, LGBTQ+, and disabled-owned businesses.
Ford’s journey illustrates the growing importance and value these programs can have for manufacturers over time. This emphasis isn’t unique to Ford. Insights from The Hackett Group’s 2025 Procurement Agenda reveal that manufacturing leaders are prioritizing supplier diversity to enhance innovation, ensure supply continuity, and strengthen supply chain resilience.
Why Supplier Diversity Programs Matter More in 2025
1. Supply chain resilience
With the possibility of new tariffs and continued market volatility, organizations are understandably worried about increases in supply chain costs and shipping disruptions. This concern has prompted a strategic pivot from reliance on long distance suppliers and markets to growing with local and small suppliers. This shift underscores the importance of a robust supplier diversity program that builds relationships with local and regional suppliers that can reduce risk and be more agile as needs change.
2. Economic resilience through equitable sourcing
Manufacturing supply chains are some of the most complex and extensive globally. Ford, for example, works with over 12,000 suppliers worldwide, spending more than $92 billion annually. By integrating small and diverse suppliers into these supply chains, companies unlock untapped innovation, improve competitiveness, and drive economic impact in underserved communities.
Spencer shared that closing the racial wealth gap in the U.S. could lead to $440 billion in additional spending on transportation and automobiles—a compelling example of the potential economic benefits of supplier diversity programs.
3. Aligning supply chains with changing consumer demographics
With the U.S. on track to become majority-minority by 2045, businesses must align their supply chains with their increasingly diverse customer bases. As Spencer highlighted, “A supply base that reflects the diversity of our customer base will be our competitive edge.”
4. Regulatory and reputational drivers
Governments, corporations and consumers are demanding greater accountability for responsible sourcing in procurement. Supplier diversity remains a proven lever for economic growth and corporate reputation.
Key Strategies for Supplier Diversity Leaders in Manufacturing
1. Leverage data to build a stronger supplier diversity program
Accurate data is the cornerstone of any supplier diversity program. Many programs fail to maximize impact due to incomplete or inaccurate supplier data. Solutions like supplier registration portals, as used by Ford, streamline data collection and provide valuable insights.
Hackett’s research reinforces this, with data analytics ranking as the top improvement initiative for procurement teams in 2025. Companies should invest in tools that provide real-time insights and help identify diverse suppliers ready to scale.
2. Integrate diverse suppliers into innovation pipelines
Engaging diverse suppliers early in the design and innovation phases of manufacturing projects unlocks their full potential. Spencer noted, “If you’re learning about an opportunity at the RFP stage, you’re likely too late. Bringing suppliers in earlier allows for strategic advantage.”
3. Enhance communication and alignment across teams
Supplier diversity leaders must advocate internally and externally. Spencer shared that Ford conducts biannual VP reviews and works closely with business unit managers to ensure alignment on supplier diversity goals. Establishing similar practices ensures organization-wide buy-in and accountability.
4. Measure and communicate the impact of your supplier diversity program
Demonstrating the impact of supplier diversity is essential. Economic impact studies, like those conducted by Supplier.io, quantify job creation and community investment resulting from diverse supplier spend. These metrics resonate with executives and stakeholders, building further support for the program.
5. Prepare for digital transformation and sustainability
The Hackett Group’s report highlights digital transformation, AI, and sustainability as top trends shaping procurement. Diverse suppliers need to be ready to meet these demands. Organizations should offer resources and training to help them succeed.
The Future of Supplier Diversity Programs in Manufacturing
As we move deeper into 2025, the imperative for supplier diversity in manufacturing is clear. It drives business value, fosters innovation, and supports economic equity. Yet, as Spencer reminds us, “This work doesn’t happen overnight. It requires commitment, alignment, and continuous improvement.”
For manufacturing leaders, the path forward involves embracing advanced analytics, fostering internal and external collaboration, and integrating supplier diversity into the core of their procurement strategy. By doing so, they won’t just create more inclusive supply chains—they’ll shape the future of manufacturing.
Creating a successful supplier diversity program at your manufacturing organization doesn’t have to be hard.
At Supplier.io, we have the data, tools, and team to help you simplify, automate, and innovate. Ready to see for yourself? Reach out today to schedule a demo with our experts.