DEI Discrimination Dies in the Supply Chain B+

According to The Prophet, this will be the year DEI dies in the top-performing Supply Chain and Procurement Departments as a result of

1. corporate abandonment (as a result of / prevention for lawsuits) and/or
2. a desire for better performance.

However, these agendas were put in place by companies that wanted to

1. have a politically correct reason to hire certain groups/individuals (who may not be deserving of the role when all other considerations [education, experience, ethics, etc.] are otherwise equal),
2. have a politically correction reason to discriminate against certain minorities who were not classified as a recognized minority (especially religious minority — if you define minority by race, it often becomes easy to discriminate against certain religions), or
3. target a market that likes a “diversity” brand
   and focus their marketing around their diversity efforts; where these marketing efforts worked, they are doubling down on that marketing — and their efforts to maintain diversity “in the supply base”.

So while many companies will silently abandon DEI in their own four walls (to deal with / prevent lawsuits and increase performance), they will double down on their DEI requirement for their suppliers. And this, as has been noted, can be extremely problematic.

Not only is it setting your suppliers up for the same problems as they succumb to mandates from big US and EU customers to diversify or die, especially in countries that are slowly catching up on anti-discrimination laws, but it’s setting them up for different problems as well.

First of all, if they’re so dependent on DEI-mandating customers that they have to fill quotas, they definitely don’t have the bank account to survive even a big government fine, yet alone a lawsuit. Secondly, if they are staffing up will less competent workers in a jurisdiction where the average worker is likely less educated and experienced in modern processes and technology as it is (as it wouldn’t be a low-cost country otherwise, which is where big US and EU companies still predominantly source from), they may not have enough competence to make the reliable, environmentally friendly, and safe products you need, with a big emphasis on safety. Reliability problems will just cost you a big repair bill or the cost of a replacement, but safety problems where an unsafe product results in permanent disability or death will cost you a massive lawsuit.

Moreover, you can’t just eliminate all suppliers that might be going overboard on DEI when your options are limited, because chances are they are all serving bigger customers than you whose business they rely on. If there’s only half a dozen factories that can make your stuff, what do you do?

You will need to spend time educating your suppliers on what DEI is supposed to be (and not how it’s being implemented in America and other countries that are misusing it). That it’s not arbitrary mandates or quotas, it’s non-discrimination and equal chances for all. That no applicant is turned away based on race, religion, etc.; that all of the best applicants from an education and experience get an interview, and that, if there truly are 2 or 3 candidates with equal education, experience, ethics and overall ability to do the job, only then will the minority/diversity factor enter the equation in the award of the job.

You will also need to favour suppliers who don’t set arbitrary quotas, especially ill-informed ones around some hypothetical, non-realistic, idea of equality. For example, 50% women in STEM jobs in many countries is just not realizable. When only 20% to 25% of graduates in STEM are women, you’re not going to get a 1:1 ratio; and if you do, then a lot of companies are not going to be at the 3:1 ratio they should be at, which is going to lead to even more women spurning STEM when they see the all male work places that result when companies with deeper pockets hire all the women and prevent them from hiring any. It’s not quotas. It’s not arbitrary definitions of racial or religious minority. It’s who do you have and who don’t you have. If you’re 75% old white male, guess what?, you need women, youth and people who aren’t white for diversity. And if you’re 75% young black female, which is very possible in many African countries, then you probably want some older individuals who are not women and not black (but not necessarily white, remember, all races, religions, and colours should be equally considered). That’s the tie-breaker at the end of the day — what you’re missing. But ONLY when all other things are equal.

Now, when the intolerant tolerant like to define arbitrary buckets, it will be hard to get this message across, but you have to educate, explain, and persevere — or else your suppliers’ DEI will be your downfall.