Understanding Supplier Diversity Demographics and Classifications

Diversity attribute information about suppliers often have added statuses and classifications that help organizations to determine the source and veracity of the information. So for example, a company may be stored in your ERP or AP system as "Women Owned", but the source of that data attribute or the validation of how accurate that attribute is, may determine how you rely on the information and when you may or may not use it.  This article should help you to understand what the categories are and how you may choose to use them.

In SupplierGATEWAY we store distinct attribute data for each diversity category for a supplier.  The categories are described below:

• Certified - Means a company that has an active (unexpired) Third Party Certification (ex: WBENC, NSMDC, etc.) Each certification could be for a distinct demographic attribute - for example, NMSDC certifies Minority Owned Business, whereas WBENC certifies Women Owned Business. 
• EDC - Means a company that has an active (unexpired) SupplierGATEWAY's Enhanced Digital Certification (includes biometric signature).  EDC certifications could be for multiple demographic attributes - for example, a company may hold an EDC certification as a Minority Owned Business,  Women Owned Business and Veteran Owned business - all in the same certification. 
• Self Certified - Means a company that has Self Certification on file. Examples of Self-Certifications include agencies like the U.S. Small Business Administration (SBA) - Small Business Self Certification.  Self certifications May have extended attribute data to identify the demographic category - e.g., Woman Owned Small Business (Here, "Woman" and "Small" would be the demographic categories covered).
• Classified - Means a company that has made an assertion (e.g., click through or selection on a form) that they are diverse for one or more demographic categories.  However, the assertion is not independently verified, nor accompanied by any specific proof (beyond the assertion). 

Note: There is another scenario that may apply here - a supplier may have previously been in "Certified" status and the certificate has since expired and not been updated.  Since at the moment we do not have any definitive proof of their certification, their status automatically changes to to "Classified" status.

• Identified - Means a supplier with Demographic data (Minority, Woman, veteran etc) but with no proof or assertion.  This is often the case with customer furnished data that may have been loaded into the system.  This type of record is useful when trying to determine the possible universe of diverse suppliers, but is often excluded when analyzing diverse spend (especially for public consumption) due to the lack of proof and possible low confidence in the accuracy of the data.

Suppliers With Multiple Attributes.

Since in SupplierGATEWAY, these statuses relate to a specific demographic category, you will also see situations where a company may be in multiple demographic categories with a different classification for each.   For example, company X is "Certified" as a minority owned business, but "Identified" as veteran owned business (i.e., no proof is available but the attribute has been placed in the supplier record.) In practical terms, the "Minority" attribute for the company X would likely be used in diversity spend reporting, but the "Veteran" attribute would likely be excluded (for reporting purposes).

What should you use?

There are no hard and fast rules. The inclusion or exclusion of suppliers is often based on the circumstance and intended use of the data.  For example:

• Diversity Spend Reporting (especially public facing) tends to use the more stringent classifications (Certified, EDC).
• Government reporting allows for a more expanded threshold so, often, Certified, EDC, Self-Certified are used (word of caution - some agencies are very specific on what certifications they will accept).
• Internal analyses to identify potential spend generally use the broadest thresholds - including "Classified" and "Identified"

Since the system has filters and controls to let you choose what to include or exclude, you can take advantage of all of the data to suit your needs.

Other useful articles that may help:

Supplier Diversity Glossary of Terms

About - Diversity Data Enrichment