Duke Energy takes an electrifying
approach to supplier diversity
“All the utilities in our area come to the table to
support diversity,” says Duke’s manager. MBE Watana
grew out of its principal’s long career with Duke
Andrew Grier, manager of supplier diversity at Duke Energy (Charlotte, NC), has been with Duke for thirty-one years. He’s been in supplier diversity for nine.
“Duke Energy’s supplier diversity program started in 1983. We did it because it was the right thing to do."
“This was before we had mandates from the federal government to do business with diverse suppliers,” he says. “The primary driver was creating opportunities for minority and women owned businesses."
“Another driver was the Carolina Minority Supplier Development Council, the local NMSDC affiliate. Suppliers involved in that organization were contacting Duke Energy about opportunities.”
“Some of the early accomplishments of the program were in the area of supplier development. Duke Energy helped minority suppliers handle some of our early recycling efforts and green initiatives. We were doing those back then, too, long before they became generally popular.”
Most diverse suppliers then were involved in traditional corporate functions like IT, logistics, office supplies and facility services. “But over time that has expanded,” Grier notes. “Today, our diverse suppliers handle many of Duke Energy’s core technical requirements: engineering, nuclear services, underground construction, substation and generation maintenance.”
Mentoring and more
Duke Energy Corp supports four million U.S. customers with 35,000 MW of generating capacity in the Midwest and the Carolinas. The company has a long relationship with its NMSDC regional affiliates, and is now a national member of the organization. “Our alliance with NMSDC helps provide the support needed to develop quality suppliers capable of handling a wide range of requirements,” Grier notes.
The company is involved in initiatives with utility commissions in five states. For example, in Ohio, “OhioGate” brings together regional utilities: electric, gas, telecommunication and water, to promote and enhance business opportunities for diverse suppliers. That arrangement has been in place for about three years. “We have a similar initiative in Indiana, and there are proposals for programs in the Carolinas,” Grier says. “We all come to the table to drive supplier diversity deeper into our respective industries.”
Grady Reid Jr, supplier diversity manager for the Kentucky, Indiana and Ohio areas, represents Duke in OhioGate. He works on supplier diversity efforts with Duke Energy’s internal governmental affairs and supply chain leaders, and with public utility commissions, Grier explains. The idea is being spread across the U.S. through an organization called the National Utility Diversity Council. Duke Energy is a founding member.
Energizing Powerful Connections
Another exciting initiative is the company’s annual Energizing Powerful Connections conference. “We bring together five regional southeastern utilities: Duke Energy, Dominion Resources, Progress Energy, Scana and Southern Company,” Grier says. “We spend the first half of the day sharing procurement best practices. Then we invite the suppliers in for buyer-supplier meetings to discuss bidding qualifications and opportunities at each of our utilities. The five of us are relatively close geographically, so we can share our suppliers,” Grier explains.
“Utilities don’t compete head-to-head in a traditional sense, so we don’t have those dynamics in play. The main driver here is economic development and job creation in our service territories. ‘Enlightened self-interest,’ is how my colleagues define it.”
Spreading the word
The Edison Electric Institute is involved, too, Grier notes. EEI has a long history of helping U.S.-based, investor-owned utilities strengthen their supplier diversity programs. “EEI shares best practices, and is a liaison with government agencies. EEI lobbies on behalf of utility interests, and supplier diversity is an important part of that.”
Spending in changing times
“Duke Energy plans to spend approximately $300 million in 2008 with diverse suppliers,” Grier reports. “We’ve had some significant increases over the past three years, and the first-tier level has gone up 50 percent!”
One challenge, he notes, “is that the company has changed quite a bit through mergers, acquisitions and a change in focus. We were an international company, but now we’re primarily U.S.-based with some South American operations.”
Watana supports Duke
P.C. Watana Engineering (Charlotte, NC) is one of Duke Energy’s many diverse suppliers. Sitthisin Watanasiriroch, originally from Thailand, is its president. The company is also diverse in regard to age: almost all its employees are folks who took early retirement, then got back in the game with Watana.
Watanasiriroch has both technical expertise and management experience. He holds a BSEE from the University of North Carolina at Charlotte, and is a registered PE in North and South Carolina and a senior member of IEEE.
He has thirty-two years in electric utilities, specializing in power system protection and control. The first twenty years, he explains, he worked directly with Duke Power; his last position there was power system protection and control manager.
Then he went on to six years with Duke Engineering and Services, “getting involved with other electric utilities and their varying practices around the world. Duke Power was looking for a very well-rounded, experienced person. It sounded like an interesting way to cap off my career, so I volunteered.”
Tech focus in a specialized area
When Watanasiriroch decided to start his own business, he naturally wanted to supply Duke Energy, “the company I know best.
“Like many electric utilities, they are preparing for a changing workforce, and replacing old electromechanical systems with electronic. My small company, with its pool of engineers and technical focus in a specialized area, can help.”
Duke Energy’s preparations for the future included an offer of early retirement to its long-term staffers. This, says Watanasiriroch, “was a great help for me. I selected the most qualified folks who were taking the package.”
Today Watana has twenty-six employees, both engineers and technicians. “We are all past fifty-five, and we have a combined 600 years of experience!” their boss declares.
The work they do
Watana’s people mainly work as designers, consultants and supervisors. “We provide engineering, design, materials procurement and support to power delivery projects. We do small projects during peak load that Duke cannot get to. They like it because we really know the business; they can hand a job to us without detailed explanation and we can get it resolved.
“We don’t do the actual construction. We produce design packages and all kinds of drawings, and final services help with commission support. Duke uses several contractors to do the actual construction.”
Watana also provides managerial staffing at need. “Most of our technical staff have more than thirty years’ experience. We can step in with technical support and construction oversight during peak loads. In the summer we do power systems disturbance analysis after thunderstorms.”
Duke Energy, clearly, is Watana’s main client. The company is an MBE certified with the City of Charlotte, NC.
Of course the long experience of Watanasiriroch and his employees is the prime element in his company’s success with Duke Energy. But he’s been invited to several supplier diversity programs and shown about new areas of business opportunity as Duke Energy and its partners expand.
“Duke has its mission, values and programs,” he says. “It helps us get information and work orders in a timely manner. It lets me get involved during peak load planning, so I’m aware of work that will be coming up for us. I’ve been able to me grow my business and still maintain my focus in my chosen area of specialty.”
Recruiting is slow
Although the Watana staff is currently all seasoned professionals, Watanasiriroch is willing to bring in and train some less experienced techies. But, “It’s slow getting new folks coming in,” he says. “Not many people are coming into electric power systems lately.
“At the end of the summer I offered a job to my intern, and I hope he’ll accept my offer after graduation.”
Qualifying Duke suppliers
Clearly, Grier and his people had no problem qualifying Watana as a technical supplier. In most cases it’s a more complicated process.
“We begin with an open conversation with the prospective suppliers. We find out what their capabilities are, and what they know about our business from a technical standpoint. Electric utilities procure so many different types of products: nuclear, IT, many forms of construction, sometimes biological, and so many other services of a technical nature.
“Today’s diverse suppliers often come out of corporate America, and are better prepared than they have been in the past,” Grier concludes.
Registering at Duke
Duke’s website registration for diverse suppliers has been in place for ten years. “Suppliers provide information to create a profile, and Grady Reid and I check out the database and look at our requirements,” Grier notes. Registration information is available at www.duke-energy.com.