Diversity, Equity, and Inclusion Advance Supply Chain Operations

March 26, 2024
Three supply chain professionals share their perspectives on the benefits of DEI programs and diversity when it comes to suppliers

Diversity, Equity, and Inclusion (DEI) are important organizational frameworks for companies, especially in the healthcare industry. Over the past several years, there have been many announcements and initiatives surrounding DEI in healthcare. Healthcare Purchasing News spoke to three supply chain industry professionals about DEI to get the latest updates in this space. The experts discussed DEI programs within their organizations as well as the importance of supplier diversity in organizations.

Seema Bhansali, vice president of Team Schein Member Experience & Inclusion at Henry Schein, told HPN, “There is a lot of variety for DEI programs in supply chain. Some programs may specifically focus on suppliers or customer diversity, while others focus on internal team members and the concept of inclusion. From my perspective, DEI in supply chain is crucial. Supply chain is very interconnected, so inclusivity is vital because as individuals work closely together, there must be a mutual understanding of one another. By doing so, it can help promote effective collaboration and help individuals navigate the intricacies of the supply chain.”

Tina Vatanka Murphy, president and CEO, GHX, said, “I have seen health systems recognize the link between health equity, DEI programs, and the overall cost of healthcare in recent years, and how supply chain plays a significant role. Today, more healthcare organizations are actively seeking to engage a diverse range of suppliers, partners, and stakeholders from underrepresented groups. The link between a diverse supply chain and health equity is significant, extending beyond just businesses and their employees to positively impact the communities they serve.”

Vatanka Murphy added, “Diversifying the businesses engaged in the supply chain leads to increased job opportunities for individuals from different backgrounds and communities. This not only benefits the economic landscape but also helps enhance access to healthcare and essential resources, contributing to better health outcomes in the community. In the United States, health inequity costs $451B annually and is expected to balloon to $1 trillion in 2040 if the issue is not addressed. When it comes to health in the U.S., zip code often matters more than genetic code.”

DEI boosts innovation

When speaking about the importance of DEI programs, Henry Schein’s Bhansali said, “These programs are important for a variety of reasons. In Henry Schein’s case, our focus is on inclusivity. Inclusivity is an important part of our Team Schein culture because it allows for the diversity of thought and advanced creativity. As a global company that operates in 33 countries, this enables us to create solutions for our customers, and the patients they serve, who represent every imaginable background and identity. It is essential that we create a place of knowledge and understanding, helping each other to feel comfortable having safe and open conversations. It's important that people feel free to be who they are. The days of hiding your life, your culture, your accents, and even your hair because you feel you have to, should be over. Overall, at Henry Schein we’ve seen that by fostering a culture of inclusion, it brings together a variety of perspectives and experiences, ultimately leading to an engaged team.”

“As a distributor, our focus is enabling access to quality care,” Bhansali added. “We do this by supporting programs such as the American Dental Association’s Give Kids a Smile program and Special Olympics, among many others. Additionally, at Henry Schein we continue to advocate for diversity and inclusion in the healthcare profession by supporting national, state, local, and culturally diverse associations.”

GHX’s Vatanka Murphy noted, “Enhancing diversity in the supply chain boosts innovation and outcomes. Incorporating a variety of backgrounds and perspectives in decision-making results in better solutions, which is what we need to address healthcare’s most profound issues. A diverse outlook can help uncover untapped opportunities while fostering deeper connections with the communities we serve. By emphasizing a diverse supply chain, organizations not only drive deeper innovation and fresher ideas, but also enhance employee retention and recruitment.”

“Healthcare organizations are being more deliberate in developing and maintaining a culture of diversity, equity, and inclusion — whether it’s the creation of employee resource groups and educational resources for staff, creating more diverse candidate pipelines, or driving supplier and economic diversity programs,” she said.

Current programs

Henry Schein’s Bhansali explained, “At Henry Schein, our emphasis on inclusion has brought our team together, fostering deep understanding and empowerment of one another. It has strengthened collaboration within Team Schein, leading to improved solutions for us and our customers.”

She added, “An example of our programs that have contributed to the strength of Team Schein are our six Employee Resource Groups (ERG), which are voluntary, employee-led networks that foster a diverse, inclusive workplace aligned with our Team Schein Values and business goals. Our ERGs are: The Women's Leadership Network (WLN), which supports women, Pride and Allies, which supports the LGBTQ+ community, Black Legacy Professionals, which supports the Black community, COLEGAS, which supports the Hispanic and Latinx community, elevASIAN, which supports the Pan Asian community, and Veteran Engagement Team (VET), which supports veterans, members of the armed forces and their families. A seventh ERG will be created that is focused on individuals with disabilities & allies.”

GHX’s Vatanka Murphy told HPN about GHX’s program. She said, “At the start of 2021, we formed the Diversity & Inclusivity Advisory Council (now known as the DEI & Culture Council). The group architected the company’s first diversity and inclusion roadmap, including the use of data to improve equity, as well as expanding mentorship opportunities, developing more robust D&I practices in recruitment and career development, and investing in dedicated D&I leadership, which resulted in the 2022 appointment of the company’s first vice president of D&I.”

“To date, nearly 70% of managers at GHX have gone through training on unconscious bias, and inclusive culture trainings have been rolled out across the company,” she added. “On average, GHX hosts 20 cultural awareness events and celebrations throughout the year, including Juneteenth, AAPI Heritage Month, Pride Month, and Hispanic Heritage Month. In many instances, GHX employees stepped up to lead these events, sharing their histories and cultural experiences with their peers.”

Diversity with suppliers

Theresa Harrison, EY’s Global Environmental Social Governance Services Leader, when asked about incorporating diversity into an organization’s suppliers, told HPN, “One of the things that it does if they incorporate supplier diversity into their supply chain is it offers them a wider range of products and services that they can offer. A lot of times we don’t have access to diverse suppliers who can provide new or innovative or cost-effective products or services that might not be available from our existing supply.”

She added, “It increases the competition and the pull of suppliers when you can ensure that you're getting that innovation as one of the key aspects that we see by having an inclusive supply chain from an economic impact. It supports the growth of small and minority owned businesses and flashing the economic development, which is kind of the output of building an inclusive supply chain. So, you're not only fostering economic development in those suppliers, but also in the communities where they are, in which most of the healthcare organizations operate. You're building not only an ecosystem of suppliers that build more unique offerings and products, but also supporting the local communities where you work. And then we've seen also from an enhanced reputation, this demonstrates a commitment to diversity and inclusion. And so, it enhances the overall organization’s reputation among patients and employees in the community because they see it impacting where they live and operate or even the companies where they might buy specific products and services from as well.”

Cate Mork, EY, U.S. Supply Chain Sustainability Lead, regarding how diversity can improve the patient experience, said, “It can form part of the community engagement or stakeholder engagement map and provide a different alternative. There are also things about diverse suppliers creating diverse products and access to diverse products, so they tend to understand populations, their own populations better. So, they understand the diversity stakeholders that are there more. One of these examples which we thought was really cool is we had a client who worked fora hospital that was procuring wheelchairs, and they were spending a fortune on these wheelchairs because the tires kept being damaged. And they were using a large kind of multinational, non-diverse owned company and as an unrelated part of their supply diversity outcomes, they switched their suppliers to a diverse wheelchair provider and that person was part of the community, understood the area outside of the hospital and professionally provided a different type of wheelchair because they understood either the patient needs there but also the physical grounds that's out of the hospital. And so it resulted in actually less cost for the hospital because the tires on the wheelchair were not popping as often and not breaking.”

“It was a better patient outcome as well and all it came down to was that kind of knowledge of those populations, local populations and understanding of the geography outside of the hospital,” she added.

Where to get started

EY’s Mork commented on where organizations can get started. She said, “The place to start is to define that ambition. So obviously that depends on who you are in that organization, and whether you have the authority to define that vision. But if you don't, you can definitely influence it. I think defining the vision, is this something that you want to explore? Is this something you want to be a leader in within the industry? Do you want to come out straight at the gate and start linking this to health equity?”

“A lot of healthcare and life sciences organizations, particularly in the U.S., already have this program and some forms,” she mentioned. “So, it's about then expanding and defining that vision, but the path would be the same. Step one would be to define that vision or influence that vision and take it to the person who does have the authority to pursue it. I think secondly, it's really around taking stock about where you are and understanding the diverse suppliers that you currently have in your supply chain that you might not be aware of. Then, figure out what you need to do to close the gap between where you are today and the 2-3 year out vision.”

Mork added that this process takes time. At EY, she mentioned, Harrison’s program is 20 years in the making. Often, in the healthcare and life sciences sectors, you want to start small scale and be successful and then expand from there. She says starting small on things like looking at your organization’s category procurement categories and where there is opportunity to increase your diverse spend, and therefore the impact, can be helpful. Then over the next two to three years as part of your vision, double down on initiatives related to that before expanding into further initiatives.

GHX’s Vatanka Murphy gave some advice on how to speak to leadership about implementing DEI in one’s organization. She said, “One word: data. One practical approach is to gather and present use case data that demonstrates the potential impact on clinical and financial outcomes, and underscore how the program will help the organization better understand the populations it serves. Drawing from real-life anecdotes is also helpful in illustrating value. Remember that it’s OK to start small – consider proposing a pilot to test and refine, rather than rolling out a full-fledged program from the start. Another approach is to look for like-minded organizations in the community who may be interested in learning together, and partner to implement a DEI program.”