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Supplier Diversity

Delphi works with D&R; Tech and hundreds of other M/WBEs

"It's a win/win relationship," says Delphi's diversity supplier development director. "We work with suppliers to leverage their expertise"


Getting together: Marcus Chao, Delphi supplier diversity development director, left; Tony Urban, VP/general manager at D&R Tech; David Purdie, D&R president; and John Taylor, Delphi senior manager for supplier diversity development.

Getting together: Marcus Chao, Delphi supplier diversity development director, left; Tony Urban, VP/general manager at D&R; Tech; David Purdie, D&R; president; and John Taylor, Delphi senior manager for supplier diversity development.

David Purdie, president, says D&R; Technology LLC (Carol Stream, IL) began in 1998 as a "brand-new startup." He and Raphael Caballero, now CEO and chair, were the founders, and also next-door neighbors.

Caballero, a native of Cuba and the majority owner of D&R;, came to the U.S. in 1962. He had a small company making parts for a General Motors truck division. Purdie, who had been a staff engineer with GM for twenty-five years and had plenty of contacts there, was chairman and CEO of another company.

They both wanted to get deeper into the automotive business, and decided to start their own firm. D&R;, which stands for David and Raphael, was the result.

"We rented a building and I drove maybe 60,000 miles that first year going to Ford, Chrysler and GM," Purdie says. The next year he added Delphi to his calling list.

Extending the Delphi organization
In May 1999 Delphi spun off from General Motors and became an independent company. One of its businesses was making automotive components, systems and modules.

D&R; took the opportunity to make a somewhat startling proposal to Delphi. It wanted to provide technology, engineering support, design and even manufacturing: a type of turnkey supplier.

"The first contact I made was with Delphi's manager of global electrical purchasing," Purdie recalls. "He knew our reputation and he said, 'You do it and we'll support you.'" D&R; was given several small jobs to show what it could handle. "While working on those jobs we saw other ways we could be helpful to Delphi. We made more proposals, and we were given the opportunity to design some parts."

In the seven years since, the initial Delphi/D&R; contact has expanded to several joint development agreements, patent collaborations, and sales exceeding $40 million for D&R;, which means jobs for nearly 200 D&R; employees. "Delphi is still our major customer and partner. The folks at Delphi have given us enormous support and mentoring to make us lean and profitable so we can be a long-term strategic supplier to them," Purdie concludes with pleasure.

Mentoring and awards
The mentoring involved members of Delphi's lean supplier development engineering group and other consultants. "We welcomed their advice," Purdie says. The mentoring program was initiated by David Nelson, Delphi VP of global supply management.

And it has worked very well, indeed. Last year Delphi recognized D&R; for thirteen flawless product launches. This year D&R; was given Delphi's minority enterprise of the year award.

D&R; also got a Delphi Pinnacle Award for supplier quality. This award was given to just seventy-seven companies, minority and non-minority, out of some 4,000 Delphi suppliers, Purdie points out.

Making Delphi proud
Marcus Chao, Delphi's supplier diversity development director, says D&R; is "really a success story. We are proud to support and develop such a great minority supplier."

The key to D&R;'s success, Chao believes, is that "They have the technology expertise and offer innovative designs to help differentiate Delphi's products from those of our competitors. It's a win/win relationship because we work together to leverage expertise, speedy design and lean practices. This is one way Delphi is becoming recognized as our customers' best supplier."

John Taylor, Delphi's senior manager for supplier diversity development, adds that "With D&R;'s low overhead, their work is very cost effective." D&R;, he says, is a fine example of a diverse supplier bringing value to the table in the form of good technology, competitive pricing and a good business case for both partners.

Real costs
Purdie recalls his first meeting with supply management VP Nelson three years ago. "I remember Dave emphasizing in great detail the importance of an open, honest exchange of information. We agreed, and so we worked on cost modeling for global pricing," says Purdie. "We have an open-book atmosphere where everything is on the table."

D&R;, as a supplier, felt it could trust Delphi with the vital figures. "We ran with it and both of us have gained."

Taylor made a presentation recently at an NMSDC managers' training session. He stressed the cost-management aspect of the modern supply chain, "where we look at all the factors in an open fashion. Minority suppliers have to step forward and embrace new requirements from the company," he told the assembled managers.

It can be a competitive advantage if they "look at the direction their customers are going in and buy into it early," Taylor notes.

Setting goals
Delphi currently devotes at least 8 percent of its annual spending to M/WBEs. Taylor says the company's goal is to have 10 percent diversity in its tier 1 suppliers, "and we're asking those suppliers to get involved at a 9 percent level with tier 2 suppliers they bring in for Delphi."

D&R; is a tier 1 supplier to Delphi, and has held its spending with other M/WBEs at 11 percent, Purdie says. He expects to be in the 15 percent range by this time next year.

D&R; helped develop a diverse molding supplier, an electrical harness supplier, and AEI, a joint venture "which gives us manufacturing facilities in Mexico, should it become desirable." In fact, D&R; located its company display next to AEI at several trade fairs, including Delphi's Matchmaker conference. "We were able to direct likely customers back and forth between the two company displays," Purdie says.

"Close to 90 percent of D&R;'s workforce is minority," he adds. "It's all part of our civic responsibility."

Diversity advocates at Delphi
When Delphi became an independent company in 1999, it immediately appointed its first corporate supplier diversity manager.

In 2003 Taylor became senior manager for supplier diversity development. He was joined six months ago by Marcus Chao. As supplier diversity development director, Chao is "really helping to push the diversity initiative," Taylor notes with appreciation.

Taylor also works with nine people who make diversity advocacy a part of their duties. There's one for each of Delphi's six divisions, along with the IT function, indirect and machinery and equipment purchasing.

VP Nelson is Delphi's executive champion for the supplier diversity endeavor. "We're also strongly supported by Rodney O'Neal, Delphi's president and COO," Taylor says. "Rodney is on record as supporting Delphi's eventual target of a billion-dollar spend with diverse suppliers."

For the last two years Delphi has been above $800 million, almost double the $450 million spent in 1999. "And within the $800 million we have more than a hundred companies that we do at least $1 million of business with," Taylor adds.

The Delphi matchmakers
"I can't wait till we get to the billion dollar club, but diversity is more than just the numbers," Taylor reflects. "Goals are good but you've got to have the processes in place."

One of the hallmarks of Delphi's supplier diversity program is its annual matchmaker, which was started a decade ago. During that time, Taylor notes, Delphi has spent at least a million dollars on the conferences and related activities. "But the business that's been generated for M/WBEs has exceeded $180 million," he says proudly.

Besides the face-to-face meetings between suppliers and purchasers, the matchmakers include a full morning of training seminars, sessions and talks. In the afternoon Delphi's global commodity directors host suppliers who enroll in specific areas such as chemical, electrical and IT.

While the M/WBEs are in those meetings, Nelson and his staff meet with Delphi's non-minority tier 1 suppliers to reiterate the company's commitment to diversity, Taylor adds.

This year Delphi began recognizing its top twenty-five minority suppliers in a special ceremony at the matchmaker.


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