CVS Caremark opens doors for diverse suppliers
Strong ties with diverse supplier networks, event sponsorships and web portal registry help prospective diverse suppliers connect with opportunities
'We've had a supplier diversity program in place for our pharmacy benefit management business for some time, and in the past few years we've expanded it significantly across the entire company," says Todd A. Gray, manager of supplier diversity at CVS Caremark (Woonsocket, RI), a pharmacy and healthcare delivery company.
According to Gray, the supplier diversity program complements the company's commitment to sound business practices and social responsibility to the communities it serves, and recognizes the critical role diverse-owned businesses play in the company's continued success.
The CVS program is a tier 1/tier 2 initiative. It includes an emphasis on interacting with diverse supplier councils and sponsoring supplier diversity events around the country. Technology is also broadening CVS's supplier base: diverse suppliers can now register on the company's web portal at www.cvscaremarksupplierdiversity.com. CVS procurement managers use this tool to draw in potential suppliers and help CVS meet its diversity goals.
To qualify for the supplier diversity program, potential suppliers should meet the definition of a minority, woman, veteran, disabled veteran, lesbian/gay/bisexual/transgender, HUBzone, or 8(a) business enterprise or small business enterprise. CVS encourages certification by authorizing bodies like the National Minority Supplier Development Council (NMSDC), Women's Business Enterprise National Council, National Gay and Lesbian Chamber of Commerce, United States Hispanic Chamber of Commerce, the Small Business Administration, or specific government agencies.
To expose diverse suppliers to opportunities with CVS, the supplier diversity organization hosts business-building events to bring together diverse vendors and suppliers and procurement and sourcing managers from all areas of the company. Vendor counseling is offered beforehand to help suppliers prepare for these events and make the pre-bid environment as productive as possible.
"We also work with our current suppliers to track and report their tier 2 spend with diverse suppliers. That offers meaningful opportunities for diverse suppliers to participate and build capacity," says Gray.
Gray emphasizes that the corporate culture at CVS Caremark encourages support of the supplier diversity program, to help ensure that all diverse businesses are given a fair opportunity to do business with the company.
"We are successfully connecting diverse suppliers with our sourcing teams every day, making it easier for everyone to do business. Although some say the value of that facilitation is hard to quantify, we know it has a positive impact," Gray says.
Worldcom Exchange maintains quality on a growing scale
Belisario Rosas and his wife Leslie started Worldcom Exchange, a local and global technology-based solutions company, in 1989 with an investment of $300. They met while both were undergraduates studying economics at McGill University (Montreal, Quebec, Canada). Rosas is originally from Lima, Peru, and his wife from Andover, MA.
His technical skills are largely self-taught. Rosas started off selling PCs to students at McGill and worked for a while at Crazy Irving's, a Montreal software store. After graduating in 1986, he and his wife moved to Massachusetts, where he went to work for Arlanda International, an information technology broker. "I was dealing in computer parts, mainly with customers in Europe," Rosas says.
Rosas developed relationships with customers in Brazil and Spain before leaving Arlanda to start Worldcom Exchange. "At first it was just the two of us. My wife did sales and I held up the technical end. This went on for a year before we hired an office and shipping person and a couple of temps. Our first big contract was with a firm in Spain. Now we have fifty-five employees," Rosas says proudly.
Growth has been gradual, but Rosas' familiarity with Spanish and Latin culture helped secure early customers in Spain and Latin America. Over the last twenty years, the company has transitioned to doing more business in the U.S., primarily in the New England area. About three years ago, Worldcom connected with CVS Caremark's pharmacy business.
"The first project we did for them involved memory upgrades to all their servers. These were DIMM modules that had to be sent to all the CVS stores. The challenge we faced was to minimize errors and DOAs. Normally on a memory stick, the DOA rate is about three percent. We reduced it to less than one percent," says Rosas.
The next project Worldcom did for CVS was to create custom keyboards for the pharmacy, an upgrade that involved making special function keys and required installation in all the stores.
"The relationship with CVS has helped us learn to develop creative business solutions, like the keyboards. With the memory upgrade, we created savings by doing additional testing to reduce the failure rate. Because anything the company buys is done on such a large scale, we have had to learn to cope with that. It's a great challenge," says Rosas.
Although the relationship with CVS was initiated independently, Rosas points out that attending events sponsored by Greater New England Minority Supplier Development Council (GNEMSDC) has enabled Worldcom to connect with other divisions at CVS. While the company has not participated in a mentoring program at CVS, they were mentored through a program sponsored by Blue Cross Blue Shield of Massachusetts in 2010.
"We discussed efficiencies of scale and process improvement and worked with a SWOT (strengths, weaknesses, opportunities and threats) team consulting group in the program. That was great," he says.
In 2008, Rosas attended a Tuck School of Business program at Dartmouth College (Hanover, NH), entitled "Growing the minority business to scale." Although the company received no outside sponsorship for the program, which teaches a variety of pathways for growth, it was well worth the cost.
"We went from $30 million in sales before the program to $70 million after. Now I'm looking into sponsoring other minority companies for that program. It was truly valuable, and we would like to see others have that opportunity," he says.
Rosas credits the company's success to its creativity and responsiveness to client needs. Those are abilities the relationship with CVS has helped foster. In addition to its certification through GNEMSDC, Worldcom Exchange is active with NMSDC. The company also holds more than 500 technical certifications with major vendors, including HP, Dell, IBM, Cisco, EMC, Oracle, and Microsoft.