MHI Solutions Improving Supply Chain Performance
If you read the headlines over the past year, you might have believed that diversity, equity and inclusion (DEI) efforts had fallen out of favor with corporations. “Pop Goes the DEI Bubble,” pronounced The Wall Street Journal. “DEI is Dead,” declared Fortune. “DEI Goes Quiet,” asserted The New York Times.
Not true—at least not within supply chains. According to Gartner’s recently released 2023 Supply Chain DEI Survey: Broad Improvements in Workforce and Pipelines, 49% of these organizations have established formal DEI objectives. What’s more, that’s a 22-point increase over the survey’s 2022 findings.
“Based on media headlines, our research team expected to find that supply chain organizations had pulled back on DEI initiatives due to increased scrutiny and greater economic pressures,” noted Dana Stiffler, distinguished VP analyst in Gartner’s Supply Chain Practice. Stiffler has led the survey since its inception three years ago, in 2021.
“Instead, to our surprise, the data showed significant gains in DEI commitments and results,” she explained. “The key driver is an increase in accountability via formalized management goals. We also saw the number of historically underrepresented races and ethnicities in supply chain organizations increase by as much as four times.”
The 314 respondents to the 2023 survey represented supply chain organizations in North America and Europe, at companies with more than $250 million in revenue. Sectors included consumer/retail, industrial, life science/healthcare and providers of supply chain solutions and services. The survey investigated DEI efforts focused on ethnic minorities, women, LGBTQ+, physical ability, military service, nationality and more. It was conducted from September through October 2023.
Why DEI Is Alive and Well in Supply Chains
Stiffler suspects the marked expansion of DEI initiatives and improved diversity within supply chains is in response to ongoing labor market challenges.
“Leaders need to cast as wide a net as possible in order to attract the talent they need to run a high performing supply chain,” she said. “They understand DEI is a strategic tool that makes their organization more attractive to a larger pool of talent. They also recognize that employees—particularly younger generations like Millennials and Gen Z—are looking at a company’s record on pay equity, management representation, community involvement and so on.”
Indeed, among respondents who reported that their organizations have formalized DEI management goals to which leaders are held accountable, the top reasons behind those objectives were to:
- Attract new talent (68%)
- Engage and retain new employees (64%)
- Improve business performance (58%)
- Attract customers (48%)
- Reflect and support local communities (44%)
- Attract investors (40%)
“Companies—particularly larger ones like those we surveyed—have far more exposure to their employees, prospective candidates, communities, investors and customers,” she added. “That exposure may also be a big motivator to actively invest in DEI.”
That said, Stiffler noted that smaller or privately held companies with similar DEI commitments report comparable positive outcomes. In other words, supply chains with smaller budgets but an equivalent dedication to DEI have experienced a similar uptick in their ability to attract a more diverse workforce. That’s because not every DEI goal requires a significant investment to achieve, she said.
“For example, a DEI objective might include achieving a representation target, such as 50% women in the next management class. Or, perhaps the goal is to de-bias job descriptions, or to restructure interview panels to be more diverse,” Stiffler explained. “None of these require a massive investment, but still advance an organization’s DEI progress—regardless of the overall company size.”