Case Study: supplier diversity at Morgan Stanley

With more than 600 offices in 30 countries around the world Morgan Stanley pursues diversity in every aspect of its business and believes that a diverse supplier base not only strengthens competition and the potential for cost savings, but also provides a means for building the economic base of the communities in which it operates.

In the UK, supplier diversity is jointly led by the firm's Procurement and Diversity divisions. Morgan Stanley has recognised that, in order for the firm to fully engage with small suppliers, a certain amount of educational work must be undertaken with its buyers. Buyers must understand that Morgan Stanley is trying to 'broaden the pool (of suppliers), not rock the boat'. The Supplier Diversity Programme comprises training for its buyers, to help them understand the importance of engaging with diverse small suppliers, and assessing who the firm's current suppliers are, in terms of both size of business and ethnic make-up.

The next step for Morgan Stanley is to look at how small suppliers can be certified to ensure that they meet basic criteria for tendering for contracts. All certified suppliers will then be collated in a database as a tool for its buyers. Morgan Stanley is also working towards introducing a small business engagement model to better define how they work with small businesses.

Morgan Stanley feels it can potentially have greater impact by raising awareness and influencing supplier diversity through its supply chain. Supplier diversity has been championed by the firm’s senior management as a leading priority, but Morgan Stanley’s challenge is to further engage its primary suppliers and help them understand the business case for supplier diversity.

Impact

• Introduced supplier diversity awareness training for buyers within the procurement team
• Worked with its prime suppliers to encourage increased local community employment within its workforce.
• Surveyed 150 of its main suppliers to identify their demographics including business size and ethnic make-up and to increase their awareness of Morgan Stanley commitment to supplier diversity
• 30% of suppliers surveyed self-classified as SMEs, ethnic minorities and women owned businesses. 10% of these stated they were ethnically owned businesses