DTE spent more than $410 million with certified diversity suppliers, representing nearly 20 percent of the company’s overall spend.

FIVE REASONS SUPPLIER DIVERSITY MATTERS

by Procurious HQ on 26/01/2017 01:16

We’re often told that supplier diversity is important for any business. But are you able to articulate exactly why this is?

Here’s a cheat-sheet to help you next time a business stakeholder asks why your organisation needs a supplier diversity programme.

1. Supply managers created a lack of diversity, so it’s up to us to fix it

There’s now a level of recognition that the historical underutilisation of diverse businesses is the fault of supply management professionals.

Contributing factors include a narrow focus on cost over other value, restrictive criteria for suppliers, inflexible and non-scalable policies. Underpinning these is a tendency for big business to be most comfortable working similarly sized entities.

A 2009 study from Pew Research has found that while minority-owned firms made up 41 per cent of all companies in the U.S., they only took in 10.9 per cent of overall revenue.

Here’s the good news. Procurement and supply managers are leading the charge to address the issue, with diversity spend now firmly on the agenda and rising every year.

Reversing the contributing factors above has led to a more inclusive focus on overall value (including social benefits) over cost, flexible and scalable policies and criteria for suppliers. There is also a recognition that the strongest business relationships are often made with smaller, more diverse suppliers.

There’s an impressive array of conferences and organisations dedicated to improving supplier diversity, including:

2. Customers are increasingly expecting diversity

Simply put, your customer base is diverse, so your business needs to be diverse as well. Partnerships with diverse suppliers will give your business a competitive advantage when facing changing customer demographics.

For example, if you operate in an area with a rapidly-growing minority population, your key relationships with minority-owned suppliers will become more important than ever.

While the public relations aspect shouldn’t be the prime reason for having a supplier diversity programme, it’s still important to track, measure and report on your diverse supplier base to win recognition from your customers for the work you have done in this area.

3. Diversity drives innovation

A study by CHI Research determined that small businesses generate 13-14 times more patents per employee than large firms. Since diverse suppliers tend to be small businesses, many companies use their supplier diversity programmes to tap into new and varied creative resources and the innovation that is occurring at these firms.

The fierce competition for business amongst diverse suppliers is another driver for innovation. Essentially, diversity brings a number of different backgrounds and life experiences into your supplier mix to overcome homogenous thinking with fresh new perspectives.

4. Diverse suppliers are often more flexible

Similarly, because most diverse suppliers are small businesses, they are usually able to offer greater flexibility, better customer focus and lower cost structures than larger businesses. Smaller, diverse suppliers are less likely to be tied down by restrictive policy, red-tape or innovation-stifling bureaucracy.

5. Well-known organisations are leading the way

Finally, some of the world’s leading companies are moving ahead with impressive supplier diversity programmes. Microsoft, for example, has recently exceeded $2 billion in annual spend with M/WBE businesses.

Another technology giant, Google, launched a best-practice supplier diversity programme in 2015. It brings key partners into the Google Academy for shared learning opportunities that will drive further innovation.

AT&T celebrate their suppliers as one of their “four pillars of diversity”, the other three being the organisation’s employees, community and marketing.

If your organisation’s supplier diversity programme is still only in its infancy, it’s important to increase your focus on this area or risk being left behind.

Interested in learning more about Diversity in Procurement? Register for ISM Diversity 2017, taking place March 1-3 in Orlando, Florida

Energy Industry Experts Gathered To Discuss Supplier Diversity, Procurement Best Practices And Sustaining Operations During Industry-Wide Downturn

HOUSTON, Sept. 23, 2015 /PRNewswire/ — Energy industry experts gathered Friday at the Energy Summit and Business Expo in Houston to discuss insights on the importance of maintaining a diverse supply chain, procurement best practices and opportunities for sustaining operations during the current industry-wide downturn.

The event was organized by the Houston Hispanic Chamber of Commerce and sponsored by Shell Oil. “This event was put together to provide a unique perspective on the implications of a changing global energy landscape on Houston’s economy,” said Dr. Laura Murillo, President and CEO of the Houston Hispanic Chamber of Commerce. “We had a significant turnout which demonstrates the importance of Houston’s evolving energy sector to our members.”
“My hope is that through today’s conversation, you as Hispanic business owners find opportunity to position your business as a partner with the oil and gas industry in the midst of this economic downturn,” said Greg Guidry, Executive Vice President – Unconventionals, Shell Upstream Americas. “The potential to unlock future growth for diverse suppliers is there and I’m committed to help Shell do its part. We hope to be the first oil and gas major to join the Billion Dollar Roundtable. ”

“We are putting in place, sponsored by our CEO, a specific targeted direct approach to increase our spend with minority and women owned businesses by 40% over the next few years,” said Deborah C. Stewart, Director Supplier Diversity & Diversity Outreach, Shell.

About the Houston Hispanic Chamber of Commerce:
The Houston Hispanic Chamber of Commerce is the leading regional advocate for the economic and civic interests of the Hispanic business community. As such, the HHCC serves as the Leader of Houston’s New Majority. HHCC represents approximately 90,000 businesses in the Greater Houston Region, ranging in size from start-ups to multi-national corporations, making the Houston Hispanic Chamber the largest in the country.

National Assoc. of State Procurement Officials (NASPO) Priorities for 2015

Author: Elena Moreland/Monday, February 23, 2015

NASPO announces the release of its inaugural Top 10 Focus Areas for State Procurement for 2015. The priority areas will help narrow the association’s focus when developing new publications and research, planning conference sessions, and hosting webinars to share best procurement practices.

The top 10 ranking of state procurement focus areas reflects the collective voice of State Central Procurement Officers who voted on their top 10 priorities, based on the relevance and existing or anticipated impact on state procurement policies in their respective NASPO member state.

Based on the voting results, the highest priority area for state central procurement offices nationwide is Procurement Reform and Reengineering of Procurement Processes. The second highest priority is the commitment to use procurement data collection and Spend Analytics as strategic assets to enhance procurement oversight and efficiencies in all states. Planning and Managing Large Technology Procurements and the need to involve state central procurement offices early in the process came in third. Following closely in fourth place came Measuring Success in State Procurement, including outcome-based performance measurements and data-driven decisions.

You can access the complete Top 10 Focus Areas for State Procurement at: http://www.naspo.org/dnn/ResearchPublications/WhitePapersIssueBriefs.aspx

SoCalGas Reports Record Spending with Diverse Suppliers

LOS ANGELES /PRNewswire/ — Southern California Gas Co. (SoCalGas) achieved a record year in 2014 with 48.4 percent of its contracting budget going to woman, minority, and service-disabled veteran-owned business enterprises. Over the years, SoCalGas has steadily increased its procurement with diverse suppliers and is seen as a national industry leader.

“We have long known that our supplier diversity activities bring economic benefits to not only our suppliers, but also to the regional economies where they do business,” said Dennis Arriola, president and CEO of SoCalGas. “At SoCalGas, supplier diversity isn’t just a program or a department. It is an integral part of our strategy, our commitment to diversity in action and a smart and effective way to run our business.”

As a result of SoCalGas’ efforts, spending last year reached a total of $571.4 million with diverse firms or 48.4 percent of the company’s total procurement. Diverse suppliers provide SoCalGas with everything from meters to pipes to information technology to advertising solutions to financial investment advice.

One example of a diverse supplier is Loop Capital Markets, an African American-owned, full-service investment bank, brokerage and advisory firm. It was one of four companies selected to work on the utility’s $250 million, 30-year bond deal. Working with SoCalGas, Loop Capital Markets has seen firsthand the company’s commitment to supplier diversity.

“We’ve heard their executives talk about supplier diversity and how it’s part of their DNA. That’s been really clear from the interactions we’ve had,” said Sidney Dillard, partner, Corporate Investment Banking at Loop Capital Markets.

SoCalGas was recognized last year for its efforts with supplier diversity and won numerous awards from a variety of organizations including: Asian Business Association of Los Angeles, Elite Service Disabled Veteran Owned Business of Los Angeles, Greater Los Angeles African American Chamber of Commerce, National Latina Women Business Association, Southern California Minority Supplier Development Council, and U.S. Hispanic Chamber of Commerce.

SoCalGas’ commitment to diversity extends beyond its diverse suppliers to its workforce and the communities it serves as well. Last year, SoCalGas donated more than $4.8 million and thousands of volunteer hours to the more than 500 communities it serves, benefitting underserved community groups in African American, Hispanic, Pacific Asian, Asian Indian and Native American communities. And SoCalGas’ commitment doesn’t stop there. Its diverse workforce of more than 8,300 employees includes 65 percent minorities.

Novation Named Among “The Best of the Best” Supplier Diversity Programs by U.S. Veterans Magazine

IRVING, Texas, Jul 09, 2015 (BUSINESS WIRE) — Novation, the nation’s largest health care services company, was recently recognized by U.S. Veterans Magazine on its annual “Best of the Best” list for Supplier Diversity Programs. The magazine polled hundreds of Fortune 1,000 companies to arrive at this nonbiased list of organizations that offer the best opportunities for veterans, transitioning service members, disabled veterans, spouses and veteran business owners.

The annual list serves to give guidance and current information to readers with the goal of spurring more active outreach and diversity policies among government agencies and corporate entities. Study results are valuable to jobseekers, business owners, students, consumers and managers.

“Novation has a strong and ongoing commitment to encouraging and supporting diverse suppliers,” said Cathy Denning, Novation’s senior vice president of sourcing operations. “This recognition by U.S. Veterans Magazine is a testament to our belief that diverse suppliers are of crucial importance to a successful supply chain process. Through our Supplier Diversity Program, we will continue to foster relationships between large and diverse suppliers.”
Since its inception in 1999, Novation’s Supplier Diversity Programhas worked with Minority, Women, Veteran, and Small Business Enterprises by providing support and networking opportunities that raises their visibility and helps them connect with prospective customers. In 2014, alliance members and affiliates served by Novation purchased approximately $1.1 billion in goods and services directly from small and diverse suppliers. In addition, Tier II (subcontractor) spend with diverse suppliers was approximately $1 billion in 2014.

U.S. Veterans Magazine Names DynCorp to 2014 Best of Best Lists

U.S. Veterans Magazine Names DynCorp International to 2014 Best of Best Lists for Top Veteran-Friendly Companies and Top Supplier Diversity Programs

Business Wire

MCLEAN, Va.–(BUSINESS WIRE)–

DynCorp International (DI) has once again been recognized by U.S. Veterans Magazine (USVM) on their lists of Top Veteran-Friendly Companies and Top Supplier Diversity Programs as part of their 2014 “Best of the Best” evaluation.

“Founded by veterans, today we employee thousands of veterans and partner with veteran-owned businesses to bring our customers the best services possible,” said James Geisler, DynCorp International interim CEO.

For the annual evaluation, USVM polled hundreds of U.S. Fortune 1000 companies, reviewing employers, initiatives, government agencies and educational institutions. The lists were compiled from market research, independent research, diversity conference participation and survey responses that were performed by DiversityComm’s agents and/or affiliates. This year, more than 250 companies and institutions participated.

“Veterans are entrepreneurial, they assume high levels of trust, and they’re resilient,” said Mona Lisa Faris, president and publisher, U.S. Veterans Magazine. “This magazine was created to support our troops, and we at USVM are proud to recognize other businesses that are also making veterans a priority.”

USVM’s goal is to open employment, business and supplier opportunities within the federal government and corporate America for veterans, transitioning service members, disabled veterans, spouses and veteran business owners.

Toyota – a respectable company, for more than just cars. Check this out…

GlobeNewswire

WASHINGTON, Aug. 4, 2014 (GLOBE NEWSWIRE) — The United States Hispanic Chamber of Commerce (USHCC) applauds Toyota for its ongoing commitment to supplier diversity. Through its continued investments with Hispanic Business Enterprises, Toyota has advanced to the highest level of the USHCC’s Million Dollar Club rankings (over $500 million) in 2013.

The Million Dollar Club was created to recognize and honor corporations that have demonstrated an ever-evolving commitment to supplier diversity. The honorees range from companies conducting $25 million, to more than $500 million in business with Hispanic-owned firms each year.

“The USHCC is proud to see Toyota strengthen the bond between corporate America and Hispanic business. Toyota has shown a true commitment to the Hispanic business community; their procurement strategies are creating jobs, spurring economic development, and bolstering opportunities in communities throughout the nation,” said USHCC President & CEO Javier Palomarez. “Toyota understands that supplier diversity is not only the right thing to do, but more importantly, it is a profitable business practice that brings them closer to their customers, investors and employees. It’s because of these investments that Toyota continues to stay highly competitive on a global scale.”

Last year, Mr. Palomarez was invited to deliver the keynote address at Toyota’s Opportunity Exchange, one of the nation’s largest minority business gatherings with 1,700 top-tier suppliers and minority business owners. Toyota has been the number one car brand among Hispanics for ten consecutive years, due in part to its robust supplier diversity programs.

“As a longstanding partner of Toyota, the USHCC has been privileged to witness the benefits of its steadfast commitment to supplier diversity. Year after year, Toyota recommits itself to investing in America’s bourgeoning Hispanic business enterprises. The beneficiary of these collaborations is more than any individual community, but rather our nation as a whole,” said USHCC Chairman Marc Rodriguez. “We look forward to expanding these opportunities in partnership with Toyota for years to come.”

PG&E Continues Commitment to Small Business Suppliers

SAN FRANCISCO, July 11, 2014 /PRNewswire/ — Pacific Gas and Electric Company (PG&E) has pledged to help small business suppliers grow by taking active steps to speed up payments for goods and services and promote better access to financing. The company’s commitment came today as it signed on to a new White House effort known as the Small Business Supplier Financing Initiative. President Barack Obama announced the initiative this morning at a White House meeting which included PG&E Senior Vice President and Chief Customer Officer Helen Burt.

Companies participating in the Small Business Supplier Financing Initiative are committing to help small businesses succeed in three ways:

  1. Providing a Working Capital Solution to Small Business Suppliers
    Companies will take active steps to lower the working capital cost of small business suppliers by paying them faster to reduce their capital needs or facilitating access to financing at a lower cost.
  2. Sharing Best Practices
    Companies will highlight tangible outcomes from their own efforts, provide visibility into their actions and promote key learnings and results.
  3. Implementing a Win-Win Solution
    Companies will carry out this pledge while minimizing new administrative or operational burdens.

“We rely on our partnerships with small businesses to help us provide safe, reliable and affordable energy for our customers,” said PG&E Chairman and CEO Tony Earley. “Small businesses are the economic engines of our service area. Their growth not only helps us be successful, but also creates more local employment opportunities. We’re excited to commit our support for President Obama’s Small Business Supplier Financing Initiative.”

The commitment is the latest step in PG&E’s ongoing efforts to help small businesses and local economies thrive in its service area. Over the past year, the company has created a special economic development rate aimed at helping businesses stay local, continued to provide assistance through its extensive energy efficiency programs and achieved record results in its supplier diversity spending, much of which goes to small and mid-size firms.

“The backbone of our supplier diversity program has been our relationships with small business suppliers,” said PG&E Senior Vice President of Safety and Shared Services Desmond Bell. “Our commitment to promoting a diverse and robust supply chain has made our program one of best in the country. These partnerships have helped us achieve our goals. President Obama’s Small Business Supplier Financing Initiative will help strengthen our supply chain and invigorate the economy.”

An example of a PG&E supplier that stands to benefit from the utility’s new commitment is Agile Sourcing Partners, Inc. – a Southern California-based enterprise with offices in the San Francisco suburb of Benicia. Agile supports utilities, suppliers and manufacturers in the gas and electric industry by providing sourcing and material supply solutions. Agile was founded in 2006 by a Hispanic woman.

“PG&E has understood paying smaller suppliers quickly allows them to operate more efficiently and deliver the best value and service,” said Agile Founder and CEO Maria Bastian Thompson, who accompanied Burt to the White House. “In Agile’s first engagement with PG&E, they extended 15-day payment terms to ensure there was no cash gap with our sub-suppliers. As a result, we hired an administrator to manage the engagement and were able to offer similar payment terms to our 70 sub-suppliers, most of whom are small businesses themselves that also greatly need quick payment for their services.

“The Small Business Supplier Financing Initiative will allow small enterprises to work more autonomously and rely less on traditional mechanisms such as bank loans and lines of credit,” added Thompson. “Alleviating some of the challenges and expenses of gaining access to capital allows small businesses to better serve their large customers.”

PG&E’s commitment to supplier diversity has resulted in an 11-year trend of consecutive year-over-year growth in diverse spending. In 2013, PG&E spent $2.3 billion with diverse suppliers, accounting for 42.1 percent of its total procurement budget and an increase of $265.2 million from 2012.