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Chevron works with TJ Cross
At Chevron, supplier diversity is a supply chain function.
TJ Cross Engineers works through the mega-company’s alliance procurement council
 Supplier diversity is a formal program at Chevron (San Ramon, CA). It’s been in existence for fifteen years under three managers, says Tanya Allen, current manager of supplier diversity.
Why have the program? Because Chevron values diversity and inclusion, whether internal or external, Allen declares. “We want to make sure our supply chain mirrors our workforce and also the communities where we have our operations; this is a key driver for us. Our supplier diversity small-business program is important to our employee network and affinity groups. It helps with our outreach, image and reputation.”
A supply chain function
Chevron is a huge company, operating in more than a hundred countries and focusing on producing safe, reliable energy now and for the future. The company’s prime businesses include oil, natural gas, manufacturing, utility and transportation. It’s also into chemicals, mining and power, and is a large producer of geothermal energy. Lots of room here for diverse suppliers to make their contribution!
Supplier diversity is a function of procurement and supply chain at Chevron. “As we see it, supplier diversity augments our overall diversity efforts,” Allen says.
Working with affinity groups
For example, Allen keeps in close contact with the company’s workforce manager, and works with the affinity groups Chevron supports. The affinity groups, she explains, “come back to us and ask how we’re doing with women, blacks, Latinos and so on. We’re glad to get questions like that; it helps to know they’re interested in our program.
“We also invite affinity group members to our supplier events because the suppliers may have their own diversity programs and want to do business with the networks.”
Working with the councils
Chevron has relationships with WBENC and many of its regional affiliates in the U.S., and also with organizations like the U.S. SBA, the National Resource Council and NMSDC. “On occasion we work with chambers of commerce, but we prefer to work with organizations that certify suppliers,” Allen explains.
“We are not just about spend,” she says. “We cannot spend with every supplier out there, so one of our strategies is to provide training and education for diverse suppliers who may or may not eventually have a relationship with us.”
In Houston, TX, for example, Allen’s people host a monthly meeting for diverse suppliers. “We’ve been doing that for years. And last year we partnered with the local SBA office to hold monthly training events for small businesses. We bring in presenters to talk about things like developing a value proposition, safety, and business etiquette. We polled the small businesses before the meeting to determine what they thought they needed to know about.”
Chevron also partnered with AT&T, Cisco and the Silicon Valley small business center in San Jose to put on a weekend training program for execs of the diverse suppliers.
Tracking the spend
Chevron monitors and tracks its spend with diverse suppliers corporate-wide in the U.S. “We look at business units for their respective spends and track that with the overall company goal. We also have a second-tier program where our prime suppliers report their spends with diverse suppliers to us.”
In 2008 Chevron spent $515 million with minority-owned businesses and $450 million with women-owned businesses. “The company’s spend has doubled since 2004, partly due to a large number of major capital projects, upgrading refineries and growth in the oil and gas industry overall.”
The 2001 merger with Texaco helped the program, Allen thinks. “Texaco had a supplier diversity program and Chevron had a supplier diversity program, and today’s program is a blend of the two. We definitely use Texaco suppliers as well as Chevron suppliers.”
Certifications
Chevron’s preferred certifications are WBENC, NMSDC and the SBA. “We cannot force anyone to be certified, but if they are it not only benefits Chevron but also benefits them,” Allen says. “It opens the door to other large companies that have supplier diversity programs.”
Procurement connections
Chevron is active with WBENC, NMSDC and the SBA. NMSDC, for example, has an energy industry group. And Allen was recently involved in Chevron’s “second ever” procurement connections forum in New Orleans, LA. It was put on by several petrochemical energy industry groups.
“We each contributed financially and it was free to the suppliers. We each did an overview of our company, then we had a luncheon and spent the afternoon in matchmaking sessions. We brought in suppliers who met our core business needs. That type of format really helps us; we will have another connections forum next year.”
Last spring Allen hosted a procurement matchmaking session with suppliers in Richmond, CA. There have been others in San Francisco, at San Ramon HQ, and in Bakersfield in the San Joaquin Valley. “We ask the local NMSDC and WBENC councils to distribute the invitations. We want to do business with suppliers in areas where we operate,” Allen says. “We’re looking for new suppliers where it makes sense and trying to leverage our good suppliers across business units.
“Chevron is a very large company. We have many business units with supply-chain groups. Let’s say downstream refining has a good environmental supplier they’re using. Why can’t our environmental management group use them as well?”
Encouraging diversity
Part of Chevron’s relationships with all its suppliers is to encourage them to spread the word on supplier diversity. “Last year we had a prime supplier forum where we asked our diverse suppliers to speak about the value they’ve seen working with Chevron. The idea was to show the primes that we believe in supplier diversity and make sure they understand our second-tier process.
“After that we had a supplier diversity fair, like a mini trade fair. Our diverse suppliers brought out their tabletop displays and got the chance to talk to our primes.”
Chevron is, of course, involved with the national boards of WBENC and NMSDC, as well as the Northern California Minority Supplier Council, WBENC South, the Los Angeles Supplier Diversity Development Council and WBEA Texas. “We are very involved,” Allen says. “Most of our reps are supply chain managers and other people actively involved in supply chain.”
Diverse suppliers are invited to learn more at smallbiz@chevron.com and www.chevronsupplierdiversity.com.
Front-end loading with TJ Cross Engineers
 Chevron has had a contract in place with TJ Cross Engineers (Bakersfield, CA) since 1996 and an alliance agreement with the company since 2001. “Our engineers and project managers work very closely with them to use their technical and management knowledge,” Allen says. “You might say they have moved into a ‘front-end loading’ engineering role with us, and the relationship with them helps leverage our in-house staff to focus more on the business.”
Lisa Wong, president of TJ Cross Engineers, is a California woman born and bred. Her mom, whose family is Japanese, was also born in California; her dad is an immigrant from China.
Growing up in oil
Wong has been in the oil business for thirty years. After college she worked in a refinery for a while but switched to “upstream” oil, because she thought it would be easier for a woman to break into production. “The well production culture was a little bit more open,” Wong says.
Then, as now, the company was Chevron. “They tried hard to mentor their young engineers and help them work together,” Wong recalls. “When they opened a new office and relocated me to Bakersfield, CA, about fifteen other women engineers came down at the same time. Many of us said, “I will only stay for a year and then I am moving on.” I was one of those who said that, and I’m still here twenty-nine years later. To this day we all get together once a year!” she says.
Founding TJ Cross
In 1990 Wong’s husband, also from Chevron, was one of the founders of TJ Cross. She left Chevron in 1995 and became one of several owners of the company. Wong and her husband are from Chevron, a third owner has a background at a different refinery, and another is from the chemical industry where he worked in sales and automation. “We wanted a variety of backgrounds,” Wong notes.
In 1995 the firm got a WMBE clearinghouse certification. “The California public utilities commission asks its utilities to seek out minority-owned suppliers,” Wong explains. “SoCal Gas was our sponsor and helped us understand the requirements and go through the certification. We’ve also been certified with the Southern California Minority Business Council and the local WBENC partner.”
Looking for an alliance
Chevron was looking for an alliance partner to provide engineering services for all its San Joaquin Valley producing assets. It wanted to foster a relationship where the partners acted like an arm of Chevron and knew all its procedures and standards.
“We had worked for Chevron before,” Wong says. “We were a local firm, we had done great technical work. But we had never been in a pure alliance contractual relationship. So they selected a firm with global presence that had experience working in all sorts of relationships with bigger companies.
“It was a hard lesson for us to accept. It forced us to realize that you need more than technical capability and confidence when working with the big, sophisticated firms.”
Moving on
Pretty soon TJ Cross had an opportunity to work for another oil company on a gain-share alliance. An engineering firm, a construction company and a procurement firm would work jointly to build a facility for the oil company. If it came in under the targeted amount the partners would share in the savings, but if the project went over the target amount they would have to eat the difference. “We went for it because we decided it would be a good learning experience, forcing us to be disciplined and work with others.
“We did it and it was a very positive experience. It was successful and came in within the budget,” Wong says.
“When Chevron came back to us in 1999 we had grown in these other relationships and experiences so we could be a worthy alliance partner. We could show the dollars and cents to prove it: real metrics.
“In hindsight, it’s probably good we didn’t get the first contract,” Wong says with a smile.
“Ever since, it has been a win/win, for us and for Chevron, too.” And when the Texaco merger came, “It was a big feather in the cap of this valley to pull all these business partners together and get on the same page and move forward. It was exciting for our company too, and helped us grow.
“We have been privileged to work with Chevron. They are great clients to have,” Wong concludes.
Chevron’s alliance
procurement council
One interesting working arrangement comes through Chevron’s alliance procurement council. “Reps from Chevron procurement/supply chain and engineering meet with us,” Wong explains. “We talk about process improvement and client feedback, resolve high-level issues, talk about future needs, plans and areas of concern, and we show them our scorecard quarterly, with various project performance indicators.”
The council is a sort of joint venture between TJ Cross and Chevron, Wong says. “Each business partner has its own alliance with Chevron.”
Providing continuity
“In some ways,” says Wong, “we actually know the Chevron facilities here in Bakersfield better than many of their own engineers do. We have the continuity, gaining knowledge and building on it.
“While their engineers are preparing for the next assignment somewhere around the world, our role is to understand the continuity here in Bakersfield and keep things well-designed and working properly.”
D/C
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