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Supplier Diversity

San Jose Water Co joins the big companies in M/W/SDVBE spend

In 2007 San Jose Water Co spent $5.4 million with M/W/SDVBEs. Computer Supplies Unlimited is a small but growing, hardworking WBE supplying SJWC


Charmaine Jackson: In 2007 SJWC spent $5.4 million with diverse suppliers.San Jose Water Company (SJWC) has been a provider of water to the San Jose, CA region since 1866. Now it’s contributing to the growth and development of minority and small businesses in the area.

In 2007, SJWC spent $5.4 million with M/W/SDVBEs. Spending has grown steadily since 2004, says Charmaine Jackson, who’s in charge of supplier diversity and community outreach for SJWC.

“In 2004 we spent about $267,000 with diverse suppliers, and in 2007 we spent $5.4 million. That was about 10 percent of our total procurement spending,” Jackson notes with pride. She credits aggressive goals and a tenacious staff.

Jackson explains that major supplier diversity efforts among California utilities started in 1999 with General Order 156 from the California Public Utilities Commission (CPUC). GO 156 established goals and rules governing the development of programs to increase participation of women, minority and service-disabled veteran business enterprises (W/M/SDVBEs) in procurement by utilities.

The next big step was in 2004, when the California Water Association, a group of seven large water companies in the state, signed a memorandum of understanding with the CPUC to include more minority businesses in their supply chains. The memorandum set specific procurement goals for M/WBEs.

“San Jose Water and the other local water utilities were too small to be subject to GO 156,” Jackson notes, “but we decided to establish our own voluntary programs. We signed our own memorandum of understanding with the CPUC to set a goal of spending 21.5 percent of our procurement budget with women, minority and service-disabled veteran business enterprises.”

Aggressive goals

At San Jose Water, “We’ve been very aggressive with our goals,” Jackson declares. “Apart from the actual contract expenditure, we hired a program administrator to head the effort. The goal was to develop a specific procurement policy, expand executive involvement, secure funding and make a budget for the program.” The tremendous growth in spending with W/M/SDVBEs shows that the effort has been a great success.

“We actually have a pretty small procurement team. But small doesn’t mean we don’t have muscles to flex,” Jackson adds. “Nick Leles, purchasing and logistics manager, heads the procurement efforts and attends outreach events to find minority suppliers. Even though he is officially in the procurement department, he trains MBEs and builds relationships with prospective suppliers. That’s instrumental to the success of the program. He and his team of three are dedicated and passionate.”

Jackson herself joined SJWC from giant Pacific Gas & Electric (PG&E), so she’s very familiar with the regulated utility environment.

Societies and certifications
SJWC accepts NMSDC and WBENC certifications, and is involved with the groups’ local affiliates. “That’s part of our strategic plan,” Jackson explains. “We are active with the Northern California Supplier Development Council and we’re on the certification committee for Astra Women’s Business Association, the WBENC affiliate in Northern California.”

SJWC supplier diversity folks also attend a variety of other minority business-oriented events, like the California Disabled Veterans Alliance, and annual conferences of the American Indian Chamber of Commerce and the California Hispanic Chamber of Commerce.

Still growing
With excellent spend and reporting in place, “We still need to do some work,” Jackson says. “We’re looking now at how to manage the growth of the program.

“We don’t consider this a giveaway. We see it as an economic development program,” she explains. “The more we do business with people and companies who live and work in our territory, the better it is for us. Entrepreneurship is at an all-time high!”

CSU supplies SJWC
WBE Marianne McCarthy: CSU offers an online catalog of 40,000 items. Marianne McCarthy is owner and manager of Computer Supplies Unlimited (CSU). “CSU has been going since 1981, and I purchased it in 1991,” she says. “I had been in sales for another office supplies company.”

When McCarthy bought the small company it specialized in printer ribbons, toners and magnetic media. “In 1993 we began to look at other avenues, and added hardware, printers and networking hardware. We implemented a ‘customer inventory’ program, and eventually started remanufacturing toners onsite.”

CSU now offers an online catalog of 40,000 items to its customers, from computers, hardware and peripherals to shredders and flash drives. It does laser printer repair and maintenance and inventory maintenance. The latest step for CSU was outsourcing the remanufacturing.

“We’re registered with and certified by the CPUC W/M/DVBE clearinghouse,” McCarthy adds.

Cold calling did it
CSU started doing business with SJWC about nine years ago. “Cold calling did it,” McCarthy notes with pride. “We asked them to let us prove what we can do.

“We talked to purchasing manager Nick Leles and the IT department, and eventually worked out a contract where we got a retainer for services,” plus, of course, the cost of the supplies. The contract now covers service and parts, with a blanket purchase order for supplies. “It’s a large contract for us, and we renegotiate it every year.”

Most of CSU’s business is geographically local: the warehouse is only five miles from SJWC’s HQ. “We can be there almost as soon as they know they need something!” McCarthy declares.

Other clients for CSU are law firms, credit unions, government agencies and correctional facilities, plus schools and colleges in San Francisco and Santa Clara. SJWC was one of the company’s first utility contracts, although they’d done some work with PG&E and AT&T. “We’re looking at other state business,” McCarthy adds. And Jackson notes that “As CSU grows, we can introduce them to the other water companies through the California Water Association.”

Mentoring the vendors

In 2009, Jackson says, “We will be sponsoring some of our vendors for networking and informal mentoring events.

“We also sponsor some of our vendors to attend the executive MBA program of UCLA’s Anderson School. We haven’t offered that to CSU yet, but maybe in the future,” she concludes with a smile.

D/C




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