The Benefits of Having Vendor Diversity in Healthcare Facilities

Working with small or minority-owned suppliers offers direct benefits to a healthcare organization and its facilities.

By Sara Barker, Contributing Writer

Healthcare organizations strive to incorporate their core values into all facets of the business, including facility management. Diversity, equity and inclusion initiatives are becoming increasingly important, but few health systems are bringing these efforts into their sourcing strategies. Only 2 percent of the average healthcare organization’s supply chain spend goes to diverse suppliers, such as minority-, veteran-, and women-owned business enterprises (MVWBE), according to the 2023 Supplier Diversity Benchmarking Report. 

While consumer expectations might be a driving factor in organizations becoming more purposeful in their sourcing strategy, working with small and diverse vendors can lead to long-term benefits for communities and the health systems. 

One of the biggest misconceptions about vendor diversity programs is that they only cater to the interests of the vendors. In reality, having a diverse supplier base not only offers direct benefits to an organization. It also contributes to the long-term growth of local communities, which in turn supports business. 

Understanding the multifaceted impacts 

Working with small vendors and MVWBEs encourages economic empowerment, innovation and competition while contributing to the long-term growth of these businesses by advocating for and supporting the use of their services throughout the bidding and procurement process when performance criteria are met. 

For the healthcare organization and its facilities, reporting on diverse vendors demonstrates a commitment to serving vulnerable populations while encouraging continuous growth and improvement. Building meaningful relationships with diverse suppliers can lead to opportunities for standardizing services and reducing costs while improving service outcomes. 

Diverse suppliers often have a strong network that allows them to fulfill unique needs, supporting supply chain sustainability and resilience by ensuring backup options to keep facilities equipped to continue serving their communities during disruptions. 

Establishing a successful vendor diversity program 

The first step in vendor diversity efforts in support of facilities is to assess the existing supplier base. During annual check-ins, facility managers should ask vendors if they identify as part of a minority population, which would qualify them as Tier 1 diverse vendors, or if they themselves are purchasing from diverse suppliers, which would qualify them as Tier 2 diverse vendors. 

Classifications might change for vendors over time, which makes it essential to ask these questions routinely to ensure accuracy. For example, a savvy small business might change ownership structure and become woman-, veteran- or minority-owned in order to gain access to more diverse business opportunities. 

Having this data sets a baseline before managers begin moving the needle. During the goal-setting stage, managers need to determine their overall vendor diversity strategy and either set a company-wide goal or tailor goals to each hospital or market. Specific areas of the supply chain, such as purchased services, might offer key opportunities to work with diverse suppliers. 

Foster collaborative growth 

Health systems can identify diverse suppliers through targeted strategies, such as working with local advocacy groups to facilitate supplier diversity symposiums. Once identified, supply chain teams need to carefully assess potential vendor capabilities, footprint and pricing during the procurement process to determine the way the vendor will integrate into the overall contracting strategy. Diverse suppliers still must meet the same criteria as other vendors, but smaller businesses might need more support in achieving aspects of the qualification process, such as insurance requirements. 

As relationships with diverse vendors strengthen, consolidating spend and partnering on projects can lead to significant cost savings, service level improvements and innovative solutions that might not be achievable with a larger, less nimble vendor. The process might require additional time to allow smaller suppliers to grow capabilities to drive powerful, sustainable results. 

Successful programs with diverse suppliers support the ongoing evolution of healthcare facilities and the growth of communities. Targeted initiatives allow healthcare organizations to integrate their core values into their supply chain strategies while promoting long-term business success and resilience. 

Sara Barker is vice president of corporate support services for Medxcel, an integrated facilities management organization focused on healthcare. 

November 20, 2023

Topic Area: Maintenance and Operations

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