Measuring KPIs effectively is critical to determining the success of your supplier diversity program. Besides providing information on the growth it also aids in setting targets, predicting year-over-year (YOY) trends and even comparing standards industry-wide. Here are the key metrics you should track, as well as how our solution improves reporting at Gainfront.
1.Diverse Spend Percentage
- Definition: The proportion of total procurement spend directed to diverse suppliers.
- Why It Matters: Most of this metric is about underlining your commitment to promoting various kinds of businesses. This way, you can set milestones, and set your expectations, to see how it develops from year to year and change the strategies accordingly.
2.Number of Diverse Suppliers
- Definition: The total count of diverse suppliers engaged in your supply chain.
- Why It Matters: Monitoring the growth of diverse suppliers helps you understand the growth of your program’s reach. Thus, Gainfront’s classified diverse supplier identification helps customers find more diverse spending to realize their objectives. Automated reports allow users to find out that supplier categories are growing. It allows you to set accurate goals for supplier engagement.
3.Tier 1 and Tier 2 Spend
- Definition:
o Tier 1 Spend: Direct spend with diverse suppliers.
o Tier 2 Spend: Indirect spend through Tier 1 suppliers who engage diverse suppliers.
- Why It Matters: Understanding Tier 1 and Tier 2 spending gives a more conclusive result of your impact. Gainfront offers a single platform to manage both Tier 1 and Tier 2(upto N-Tier) reporting seamlessly, making it easier to track, manage, and demonstrate your diversity spending across the supply chain. This unique capability becomes crucial to providing accurate real time data for forecasting and reporting as well as meeting a comprehensive supplier diversity evaluation.
4.Cost Savings and Value-Added Contributions
- Definition: The financial benefits or extra value derived from collaborating with diverse suppliers, which may include improved quality, innovation, or efficiency in processes.
- Why It Matters: Gainfront’s analytics allow you to monitor cost savings and value creation, giving you a clear understanding of how diverse suppliers impact your financial performance. This data-driven approach facilitates more precise goal setting and helps in forecasting future savings.
5.Contract Awards to Diverse Suppliers
- Definition: The quantity and monetary value of contracts granted to diverse suppliers over a defined timeframe.
- Why It Matters: Keeping track of this metric regularly helps you establish annual targets and assess your progress toward diversity objectives. Gainfront’s platform offers access to a worldwide database of diverse suppliers, enabling you to invite them to sourcing events to achieve your projected goals.
6.Diverse Supplier Retention Rate
- Definition: The proportion of diverse suppliers that maintain a business relationship with your organization over time.
- Why It Matters: A high retention rate reflects strong partnerships and effective engagement strategies. Gainfront provides predictive analytics through its engagement center to anticipate retention trends, allowing you to proactively mitigate potential risks.
7.Economic Impact and Job Creation
- Definition: The economic benefits and employment opportunities generated through spending with diverse suppliers.
- Why It Matters: Gainfront facilitates automated tracking and visualization of your economic impact on a global scale, helping you showcase the value your program brings to communities. This information is essential for government reporting and compliance, ensuring your company adheres to federal regulations.
8.Supplier Performance and Compliance
- Definition: Evaluating the performance and compliance of diverse suppliers based on quality, delivery, and service standards.
- Why It Matters: Regular assessments of supplier performance are crucial for maintaining high standards and ensuring compliance.
Automation in Government Reporting
Timely and accurate reporting is essential to ensure compliance with the government contracts and grant provisions. Gainfront automates data collection and reporting, ensuring you meet government requirements effortlessly. This results in a more streamlined reporting process with reduced manual effort and more real-time insights into your supplier diversity achievements.
By taking advantage of Gainfront’s all-in-one automated supplier diversity solutions, you benefit from a single platform that efficiently handles both Tier 1 and Tier 2 reporting. This enhances accuracy and provides a clearer view of your program’s impact throughout the supply chain. Coupled with Gainfront’s powerful analytics and automated government reporting, your supplier diversity program is ensured to be not just compliant, but also geared for lasting success.
Rahul Asthana has a PhD in Operations Management from the Anderson School at UCLA. He has 25 years of experience in supply chain management, starting his career in IBM working in supply chain operations. He then moved into product management and product marketing of supply chain software while at SAP and Oracle. He manages product strategy and product management at Gainfront. In terms of hobbies outside of work, he really enjoys tennis. Follow Rahul Asthana on Linkedin!