Merck: committed to supplier diversity
The supplier diversity effort at Merck includes a mentoring program that has helped diverse startups grow into multimillion-dollar businesses
Although a supplier diversity program has been part of Merck & Company (Whitehouse Station, NJ) for many years, initial efforts were informal. But over the last seven years, big strides have been made by the pharmaceutical giant and global healthcare company, and in 2011, Merck spent $910 million with small and diverse business, about 16 percent of its total spend.
"I've been leading the program for over a year and a half now, but I've been supporting efforts for supplier diversity as a sourcing professional since I started in global procurement in 2008," says Saunjah S. Powell-Pointer, associate director for supplier diversity.
Driving growth in key areas
Powell-Pointer started with Schering Plough in global engineering services. That company merged with Merck in 2009. She has an electrical engineering degree from Southern Illinois University (Carbondale, IL) and an MBA with a focus on finance from Rutgers Business School (New Brunswick, NJ). Since the merger, Powell-Pointer has used her analytical and organizational skills to establish internal operations to drive growth in four key areas: strategic external outreach and globalization, supplier development and mentoring, customer focus and compliance, and internal awareness. In 2007, she helped start what is now the League of Employees of African Descent (LEAD) at Merck.
"We've launched a supplier diversity ambassador program, where we partner with employee resource groups to increase internal awareness of the program. These ambassadors will be equipped with tools to help them spread the business case for supplier diversity throughout Merck," Powell-Pointer says.
Global supplier diversity efforts are ongoing; a team has been established to launch programs in the U.K. and Canada. Other external activities include partnering with more than thirty organizations that help Merck identify small and diverse suppliers for business opportunities. The company recently became a member of the U.S. Hispanic Chamber of Commerce.
Supplier development and mentoring
Supplier development and mentoring is an important component of Merck's commitment to supplier diversity.
"We believe in providing resources that enhance the capabilities of diverse suppliers and allow them to better serve their clients," says Powell-Pointer. For example, Merck recently held a workshop on talent management and best practices on engaging and retaining talent. Two dozen diverse suppliers attended the workshop. The company also sponsors scholarships to the National Minority Supplier Development Council (NMSDC) advanced management education program at the Kellogg School of Management at Northwestern University (Evanston, IL), and to the senior executive management program at the Tuck School of Business at Dartmouth College (Hanover, NH).
Merck's one-on-one mentoring program partners a procurement professional with a diverse supplier to address major areas of development. Suppliers go through an assessment program to identify key areas of opportunity and to develop strategies.
"It's a twelve-month program with monthly sessions. I'm plugged into the quarterly sessions, and help facilitate the process. An executive sponsor from the relevant business division also attends quarterly sessions and, where appropriate, can expose the supplier to key decision makers within that business," says Powell-Pointer. Sponsors share tips for navigating the landscape of a Fortune 100 company and insight into the global marketplace in general.
Powell-Pointer has two people on her supplier diversity team: Will Holmes, who focuses on systems, reporting and relationship management, and Kathy Raniero, who manages logistics of external outreach. But procurement professionals are also essential to the overall efforts. The supplier-diversity operations leadership team includes about ten sourcing managers and directors across the company who are responsible for annual targets in their areas. They also help with mentoring and development efforts.
Global IT procurement and a commitment to diversity
Darrien Pinkman, director of business process solutions for global procurement, has been with Merck for five years and worked in supply chain management at Lucent prior to that. Pinkman has a BS from Centenary College (Hackettstown, NJ) and a masters degree in project management with an emphasis in computer science from Stevens Institute of Technology (Hoboken, NJ).
Pinkman is committed to supplier diversity. "Diversity isn't in my job description, but it's my passion. I work in the IT area of global procurement and I'm responsible for IT services, business process outsourcing and automation engineering. That's about $750 million worth of spend annually. I support every business division that requires those services," Pinkman says.
But commitment isn't confined to Pinkman and the supplier diversity team. Powell-Pointer notes that there is renewed executive attention to supplier diversity across the organization. "The executive committee has signed a commitment to actively engage with diverse suppliers, including women, minorities, people with disabilities, veterans, small businesses, and members of the LGBT community."
Pinkman met Gene Waddy, CEO of Diversant (Red Bank, NJ), at an NMSDC event in 2009. "It was a win-win situation because their capabilities matched Merck's needs and they also happened to be a diverse firm," says Pinkman.
They had a few conversations about the mentoring program at Merck. Pinkman explained that the goals of the program are to help small and diverse businesses understand the complex landscape and culture of Merck and to identify and attain opportunities to work with procurement.
"We looked at where Diversant wanted to be in ten years and how they stood up to benchmark competitors like IBM and Accenture and tried to help them get to 'best in class,'" he says.
An ME in IT
Diversant is an IT staffing firm that Waddy founded in 2005 after he was downsized from a large international IT staffing company. Raised in Neptune, NJ, Waddy has a BSME from Fairleigh Dickinson University (Teaneck, NJ).
Despite his mechanical engineering degree, he has spent almost his entire career in IT, and learned PC and server technology from the ground up. After acquiring strong skills on the technical side, he transitioned into sales and technical sales support. "I wanted to be out in front of the client building relationships. My career has been a series of self discoveries."
When he got downsized, it was the start of another journey of self discovery. "I went home and told my wife that I'd been laid off. She was seven months pregnant with our second child. I said 'Guess what happened to me today.'
"I had wanted to be an entrepreneur, and this really forced my hand. My wife has been wonderful; she provides a strong support system.
"Initially it was a challenge. It was just me and one other person, but the first year we made $300,000. Then things started to pick up and we grew exponentially after that," Waddy says.
The current office staff includes eighty employees with close to 600 consultants spread out across the country. Revenues in 2010 were about $56 million and in 2011, nearly $82 million. This year Waddy is looking for 12 to 13 percent growth. "We're plowing a lot back into the company this year and getting ready to blast off."
Certification spurs growth
Waddy credits certification for a big part of the company's growth. "We've been able to gain access to Fortune 500 corporations, mostly through their supplier diversity programs. The NMSDC certification is very important. Once we got that, we were able to build a network in supplier diversity," he says.
But he is quick to add that while certification may open doors, you have to be able to deliver. "We compete effectively with multibillion-dollar IT staffing firms. You have to make the business case. By combining certification with performance, and adding that we are a domestic African American-owned company, we can really set ourselves apart."
Waddy says that his company sees the world a little differently from the competition. "Some competitors expect the clients to adjust to them, but we try to understand the clients' business and craft custom solutions. As a result, clients will give us as much business as we can handle. We're set to make it to $100 million soon; only one percent of IT staffing firms ever make it to $100 million," Waddy says.
A critical relationship
The relationship with Merck has been critical for Diversant, and Pinkman has been an important link in that relationship. "Darrien helped us penetrate and prosper at Merck. We get to work directly with Merck stakeholders in IT, procurement and supplier diversity through the mentorship program. Their commitment to supplier diversity is real," Waddy says. The mentoring program has allowed Diversant to grow its business with other pharmaceutical companies as well. "When you become a preferred vendor at Merck, it's a tremendous help," Waddy says.
When the Merck mentoring program ends, the relationships that have been established do not. Although the program is only twelve months long, Pinkman adds, "In truth, the mentoring doesn't end. Gene will always have access to my office."