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‘Value added’ is the watchword
for
We Energies
A diverse supplier base adds business value, says the diversity director. M/WBE E. R. Abernathy Industrial
provides both resources and solutions
 Jerry J. Fulmer wears two hats. He’s supplier diversity director for holding company Wisconsin Energy Corp (Milwaukee, WI), and also for We Energies, the gas and electric utility parts of the company. In electric power alone, the company serves 1.1 million customers in Wisconsin and upper Michigan.
The company’s supplier diversity initiative began in the 1990s and did some great
things at the time, Fulmer recalls. But the really big push, and Fulmer’s part in it, began in 2002-2003.
“The company hired me and we put a lot of processes and strategic objectives in place to look at supplier diversity from a value-added standpoint: to make it more of a business and solutions provider, not just a social program or an afterthought.”
Augmented supplier diversity was part of the company’s “Power the Future” plan, which began with building more generation capabilities including natural gas, coal and wind farms.
“We saw it as good business”
“Our executives and I saw it as good business to identify M/WBEs to help in the projects. We also had stakeholders external to the company who wanted to be sure we were supporting the communities we serve and live in.
“So we looked at minority and women-owned businesses, both large and small,” Fulmer says. “We were looking first at the products and services we would be procuring, and we wanted to be sure the companies had the financial stability, capacity and capability to meet our needs.
“Then and now, whether they’re large or small, if M/WBEs fit those areas we want to make
sure that we bring them in.”
The first steps were to look locally and regionally, “But we didn’t limit it to that because we know business is becoming global. We view supplier diversity as
a companywide business objective, and it is included in the company’s performance plans
and metrics.
“It makes the job a lot easier,” Fulmer notes with a smile, “when you know you have support from your chair, president, and CEO, other senior execs, and people within the company who affect who you purchase from. But a program like this is never easy to do.”
Many departments
Within the utility, departments like customer operations, fossil operations, IT and customer services have their own budgets and business plans. Fulmer works with the supply chain management department, and supplier diversity liaisons in each department and business unit. “Who’s better able to tell me about their own area than the people who are in it?” he asks.
But Fulmer himself reports directly to the senior VP and chief administrative officer.
Planning ahead
Right now Fulmer’s group is planning for the rest of 2009 and 2010. “We identify projects and opportunities where M/WBEs can be considered and utilized. Knowing what’s going on, I’m better able to identify M/WBEs that have the capabilities and experience, and have registered with us. We connect with them through our corporate membership in the minority and women business advocacy associations.”
Supplier diversity is attracting attention throughout the company, Fulmer finds. “All the
other groups and departments are bringing it up at their meetings and adding it to their business plans!”
Involved with associations
We Energies supports a good number of minority and woman-focused business associations. The national WBENC and NMSDC and their regional affiliates are prime, of course, because “Those are the ones where I’m going to find companies I know can support us in our business,” Fulmer says. He also works with organizations like the Wisconsin Supplier Development Council, Hispanic Chamber of Commerce of Wisconsin and the Business Council of Milwaukee.
Another invaluable aid is the Edison Electric Institute (www.eei.org). David K. Owens, EEI’s EVP for business operations, was the keynote speaker at a recent supplier diversity symposium hosted by We Energies. “David is a friend and business colleague,” Fulmer says, “and he interfaces with all the CEOs in the utility industry. I wanted him to come up and talk to our minority- and women-owned businesses about the industry so they can be prepared not only for now but for the future. The feedback we got was very, very positive.”
Getting connected with E.R. Abernathy
Edna Abernathy is president and CEO of E.R. Abernathy Industrial Inc (Sussex, WI). “When I came here I already knew of Edna because of the work she did with other corporations,” Fulmer says. “I loved Edna’s professionalism, and I just knew that We Energies was going to do something great with her firm.”
As he does for other likely M/WBEs, Fulmer talked with his supply chain “to start getting Edna connected with the right people responsible for purchasing her goods and services, not as a social issue but as a resource and a solution provider.”
Edna Abernathy had heard about Fulmer, too. “Dr Floyd Rose at the Wisconsin Supplier Development Council told me We Energies had a new guy who was charged with improving
the supplier diversity relationship, and that he would probably be at the next trade show,
which he was.
“Jerry asked me what E.R. Abernathy was doing with We Energies and I said, ‘Nothing much.’ Then he said, “Well, I’m going to do everything I can to find out why not.’”
Abernathy was already doing good first-tier business as an industrial supplier with major firms like Miller Brewing, Mitsubishi and other Fortune 500 and 100 companies. But when it came to We Energies, “I had done some bidding with them,” she says, “but still had not been successful in winning their business.”
Identifying an opportunity
Fulmer worked with the We Energies procurement team to identify an opportunity for Abernathy. “One of the key things was that we were already set up with Electronic Data Interchange (EDI),” Edna Abernathy says. “We had already committed to the technology and were positioned to handle large volumes of business.”
Abernathy’s work with We Energies started with day-to-day industrial and utility-specific supplies: a bundle of maintenance, repair and operating (MRO) items which were convenient to source from one company. A couple of years later, as the utility moved to reduce its number of supply vendors, E.R. Abernathy’s competitive pricing, quality and excellent customer service led to a seven-year contract which began in 2007.
“We’re still small enough to make sure all our customers feel very special,” Edna Abernathy notes with a smile. Her company has just ten fulltime and five part-time employees, in addition to a very deep catalog.
It also has a supplier diversity program of its own. “Whenever we’re able to do business with other M/WBEs we make a point to do so,” she declares. It’s a welcome perk for her customers with supplier diversity goals.
Winning the Star Award
Sometimes, Fulmer notes, Abernathy serves as a supply consultant to We Energies. “We’re always doing research and legwork on green-friendly supplies,” Edna Abernathy reports. “We look for what’s new and innovative coming down the pike that would save us and our customers money and eliminate redundancy.”
Last spring Abernathy was presented with a We Energies Star Award of Excellence for outstanding customer service. It honored the company for helping to consolidate the utility’s supplier base, standardize products and automate procurement and payment processes, in addition to supplying materials to support the construction of new power plants.
E.R. Abernathy is currently managing procurement for some 1,500 individual stock items for the utility, many of which can only be purchased from one manufacturer. The M/WBE manages the many suppliers and identifies ways to standardize and improve competitive costs.
Certifications and shows
E. R. Abernathy is certified by a number of NMSDC affiliates. “There’s a rhyme and reason as to why we’re certified where we are,” Edna Abernathy explains. “We have clients and sales offices in those states. Everybody is looking for a supplier who can be more national and more diverse.” Her company is currently servicing sixty-two We Energies locations in Wisconsin and Michigan, good reason for being certified in those two states.
Fulmer notes that he serves on committees for several of the NMSDC affiliates. Edna Abernathy enthusiastically participates in NMSDC trade shows on the local, regional and national level, as well as in shows and meetings put on by the EEI.
We Energies’ own event
The utility puts on its own supplier diversity symposium, held in conjunction with one of the Wisconsin Supplier Development Council’s quarterly meetings. “We had the third one last year and they’ve been very successful,” Fulmer says.
The event is organized according to the utility’s various departments: supply chain, corporate communications, administrative services, IT and many more. Each has its own table.
Diverse supplier principals and reps visit the tables that are most likely to be looking for
their products or services. “They’ll be talking to the people who will actually do the buying,” Fulmer says.
Fulmer gets a lot of positive feedback from the events. “In the past three years we’ve averaged 200 people or more from diverse suppliers. Knowing who the companies are and what product or service they provide, we can match them with the appropriate tables.”
“It’s great,” Abernathy agrees. “I don’t have to do any guessing on who to see, and I can do direct follow-up because the person I need to be talking to is right there.”
Matchmaking
Fulmer’s group goes farther. “We try to look at major purchasing over the next two years, and then I work with the department doing the purchasing. It’s important for us to let the companies know what we’re looking for.” He goes on to arrange matchmaking meetings. Then, in some cases, the mentoring begins.
“Each supply chain rep’s goal is to have matchmaker meetings with at least two or three diverse suppliers a year”; maybe ten to fifteen in all. “We also do this informally at trade shows,” Fulmer adds. “We find there are many M/WBE firms that can help support us if we let them in and give them an opportunity to present and speak to us.”
Mentoring
Every year Fulmer tries to add a few NMSDC “best practices” to his operation. Recently he began more formal mentoring.
“We plan on working through the Wisconsin Supplier Development Council’s minority business management seminar at the University of Wisconsin-Madison,” he explains. It’s a weeklong series of courses covering financials and other criteria, and Edna Abernathy is a graduate. “In a week’s time you get invaluable knowledge about running your company, being systems-dependent instead of people-dependent. It was just phenomenal!” she says.
Fulmer proposes to send one or two of We Energies’ diverse suppliers every year, “because the more they learn and bring back, the better they can support and help us in our business.”
E.R. Abernathy: the startup
Edna Abernathy’s bustling company began as a dream. “I researched the distribution industry and found there were not a lot of women or minorities in it,” she recalls. “I thought it was an industry with room for growth and not as capital-intensive as something like manufacturing. My feasibility studies said, ‘Hey, it’s a good industry, go for it!’” In 1991 she, as the majority owner, and her parents incorporated and went into business.
Her background was not in energy: a BA in political science, an MS in urban affairs and some law school. “But my formal training lends itself to good negotiating and people skills and the rest I’ve learned on the job,” she says.
Edna Abernathy is pleased with her relationship with We Energies. “It means a lot to me in terms of strategic partnering,” she says. “We come together as partners with beneficial results for both parties, and I think that is outstanding.
“I feel We Energies is a champion in terms of doing supplier diversity and doing it well.”
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