Engaging diverse suppliers is important for everyone who does business
"Small business is the backbone of the United States." – Jamie Crump, United Rentals
"We believe diverse businesses bring value to our company through their unique skills and perspectives." – Marianne Strobel, AT&T
By Sue Marquette Poremba
'Supplier diversity is not only important for everybody who does business, I'd say it's important for everybody who lives in society," says Jason Kwan, VP of global strategic sourcing at ManpowerGroup (Milwaukee, WI).
Joan Kerr, director of supplier diversity and supplier development at Pacific Gas and Electric Co (PG&E, San Francisco, CA), adds that working with minority business enterprises (MBEs) "helps us engage in more creative and innovative solutions to the challenges we face, enhance the diversity of businesses in California and enrich the communities where our customers and employees live and work."
Kerr's and Kwan's sentiments are pretty universally shared. As companies strive to reflect the makeup of the diverse world around them, they increasingly turn to MBEs to provide services ranging from call-center technologies to solar-site preparation and plenty in between.
Small business is the backbone
"Small business is the backbone of the United States," says Jamie Crump, director of indirect strategic sourcing and supplier diversity at United Rentals (Greenwich, CT). "That's where jobs are created. Between the diversity aspect and the small-business aspect, I think supplier diversity will have an important role in our economic recovery."
ManpowerGroup: how to move things forward
"Diversity is something we believe in," continues ManpowerGroup's Kwan. "We think of diversity in terms of diversity of thought, and in both business and society we need to be thinking about how to move things forward in the future. Diverse suppliers are important to bringing a wide range of ideas into the company."
ManpowerGroup is, of course, in the business of providing workforce solutions to its clients. It operates a family of companies: Manpower, Experis, ManpowerGroup Solutions and Right Management. "Most of our efforts in bringing in diversity are to support our clients," Kwan says. "But we also buy services and goods to run our own offices, and here again we're thinking diversity."
When considering suppliers, Kwan notes that first and foremost the supplier has to be able to do the job. To help small businesses make the first step, ManpowerGroup has developed a supply-chain team to follow up when a small business initiates contact. The team evaluates what the supplier can do; if the report is favorable the small business will be invited to submit a bid the next time an opportunity arises.
"Having a program where we actively listen to suppliers who reach out to us is obviously a good way to find our suppliers," Kwan says. "We're lucky that we're a well-known company and people do seek us out: that means I don't always have to be out looking for suppliers," he notes with a smile.
With the MBE on board and doing well, it may be invited to join ManpowerGroup's supplier roundtable. This gives the new MBE the chance to network with the other small businesses serving ManpowerGroup. For some new companies an executive mentoring program may be offered. "If you help your suppliers grow they will take extra steps for you," Kwan believes.
Collabera: ten good years of support for Manpower
Collabera (Schaumburg, IL) is a global end-to-end IT solutions and services provider. Today its 6,500 professionals around the world bring in more than $450 million in revenue.
"Our relationship with Manpower goes back to 2002 when we started supporting a pharmaceutical client as a diverse vendor on a national level," says VP Kekin Shah. "This work gave Collabera the opportunity to showcase our competencies and capabilities. With Manpower's mentoring and leadership Collabera has become a strategic partner, supporting multiple clients for Manpower.
"This position has given Collabera a consultative relationship and a more continuous stream of work. We have joined with several other suppliers to form a supplier diversity advisory group under the Manpower umbrella," Shah discloses. "We are national and regional vendors with expertise in staffing, mentoring and partnering with other diverse vendors."
AT&T: connecting people, gaining partners
At AT&T (Dallas, TX) the mission is to connect people with their world, everywhere they live and work, and to do it better than anyone else. AT&T calls on diverse suppliers to help achieve this goal.
"We believe diverse businesses bring value to our company through their unique skills and perspectives," explains Marianne Strobel, executive director of AT&T global supplier diversity. AT&T collaborates with diversity advocacy organizations and corporate forums, providing leadership, mentoring and educational programs.
AT&T's supplier diversity program is an essential component of the company's business strategy, Strobel adds. "We look for opportunities to work with diverse suppliers in all aspects of our business, and we believe it's vitally important for our suppliers to work with diverse companies."
That's why the company created the AT&T Prime Supplier program, which helps its biggest suppliers increase their use of diverse businesses within the company supply chain. That opens the door further to the company's minority-owned vendors.
Strobel adds that not all MBEs are ready to be direct suppliers to AT&T. They may start as tier 2 suppliers, and that's OK.
PG&E: all-time high in spending
Through its supplier diversity program, Pacific Gas and Electric Co (PG&E, San Francisco, CA) has been working for more than thirty years to bring more women-, minority- and service-disabled veteran-owned business enterprises and small businesses into the supply chain. "In 2010 we achieved our best performance to date for diverse spending," says the supplier diversity and development group's Joan Kerr. "We exceeded our aspirational goal of 30 percent for an all-time high of 32.7 percent." That, she notes, comes out to $1.13 billion in spending with diverse suppliers. "Our 2011 results should be significantly higher."
PG&E works with MBEs that provide products and services in virtually all areas: energy generation, environmental services, energy efficiency, gas and electric construction, transportation, marketing, investment management, HR and more. Kerr declares that businesses with environmental plans and the ability to demonstrate their green advantage are much more competitive in today's market and may find new business opportunities in the green economy.
A sustainability program can also lower operating costs. Many customers have already made green practices critical elements of their business plans, Kerr notes, so suppliers need to know how to support customers' sustainability goals.
PG&E is now a "renewable energy leader," she adds, "and diverse suppliers are fully engaged in our solar and hydroelectric generation initiatives."
The company recently launched its "Diverse suppliers go green" program. It shows suppliers how to become more competitive by establishing their own sustainability programs, reducing their environmental footprints and defining their green business opportunities.
"We also encourage diverse suppliers to become certified through the National Minority Supplier Development Council (NMSDC) and the Women's Business Enterprise National Council (WBENC) because of the great training and networking opportunities those organizations provide," Kerr adds. Both organizations have many Fortune 500 companies as members and each has an extensive database of certified suppliers.
WBE MJ Avila works with PG&E
Mary Jo Avila has been working with PG&E since 2007, when MJ Avila Co (Fresno, CA), her general contracting business, was first brought in to do grading and land restoration. "In talking to us, PG&E found we're capable of a lot more, and from there we were given the chance to bid on other projects," she says.
MJ Avila Co is currently focused on working with the federal, state and private utility markets. Avila can handle all aspects of site preparation, grading and equipment operations. "And lately we've been growing in solar site construction and maintenance," Avila notes.
She's doing solar work for PG&E. Her company started out bidding on a contract for phase 1 of solar-site preparation: grading, fencing, paving and excavating. "Then comes phase 2 when the electrical or panel companies bid to design and install the solar field and panels," Avila explains. "Our construction experience means we can do racking and installation of panels along with road-building at this phase too, and since we're already familiar with the area and soil conditions, we're a good candidate to bid phase 2 work."
Working with PG&E has given MJ Avila a great opportunity to grow. "We were always ideally positioned for the kind of work needed at a solar site, but we wouldn't have thought about expanding into the area if it hadn't been for our work with PG&E," Avila says.
The opportunity to "give chances" is important to PG&E, Kerr says. The utility's diversity team reaches out to suppliers, sponsoring activities and events that let the MBE discuss its capabilities with other companies. Avila never misses the chance to participate in these events when invited. "There's always a new door to open and a new face to see and talk with about your company's capabilities."
Grainger values diversity and inclusion in its supplier base
Grainger (Lake Forest, IL) is a distributor offering more than a million maintenance, repair and operations products and services. It regularly turns to diverse suppliers for some of the goods and services it offers.
"Our customers want to do business with suppliers who can help them achieve an inclusive supply chain, and they seek partners who share their values, goals and objectives," says Nancy Conner, supplier diversity manager. "Our supplier diversity program helps our customers meet their goals and run their businesses more efficiently."
Grainger pulls from a 3,000-plus supplier base; becoming a Grainger supplier means meeting important requirements, Conner says.
"Of course our product managers have a variety of criteria for suppliers, such as having adequate manufacturing capabilities. In our diverse suppliers we look for certification by NMSDC and WBENC, and we also look for innovative ideas and solutions to improve our product portfolio and/or increase efficiencies within our own operations.
"With these credentials our supplier diversity team can help the new MBEs navigate our huge organization to meet the appropriate decision-makers and hopefully get to work."
United Rentals: a mix of good potential
MBEs fit into the scope of United Rentals exactly the way any other company does, says supplier diversity director Jamie Crump. "It's about bringing a mix of good potential companies to the table. Once they get the ticket to play, it is up to them what they do with it."
When looking for suppliers the primary goal is to find good, flexible companies that can add high value and are competitive. As an example, Crump points to supplier Nadicent Technologies (Glastonbury, CT).
Nadicent bid against some big Fortune 500 companies for a recent contract, and the MBE won, she says. "It's about ensuring that the smaller companies have opportunities to compete with the big ones for the business that's there."
United Rentals has had a lot of need for suppliers who provide technical services. Last year it decided to look for just a few companies to handle its computer and network solutions. "We had plenty of companies bidding, including the big ones. We ended up going with three companies, and two of them are MBEs.
"The whole spirit behind supplier diversity is helping those companies be successful."
Nadicent Technologies is a telecom advocate for United Rentals
Nadicent is a consultant and a telecom advocate for companies like United Rentals, representing more than forty major telecom service providers. "Because we have all those players, we are neutral in terms of whose portfolio we present to the client," says Arvin Chaudhary, president. "We work with the clients to understand their needs, and develop requirements to maximize the value for our clients. We bring the suppliers and their final proposals to the table, but we sit with the clients to make sure they are getting the best value."
Chaudhary first connected with United Rentals through the NMSDC. The connection continued informally until the opportunity came for Chaudhary to bid on a project. "And then we engaged!" he says.
His relationship with United Rentals has benefited his company in two ways. "One, you are working with a big-name company and adding value to that company. That has resulted in more credibility and business for us," he says.
"The other way is our exposure to peers of United Rentals and the opportunity to engage with them. That's always the biggest challenge: engaging with the right decision-makers at these corporations."
COMPANIES INTERESTED IN DOING BUSINESS WITH MBEs
Check out the active programs at these companies' websites.
|Company and location
|AT&T (Dallas, TX)
|Coca-Cola Company (Atlanta, GA)
|Grainger (Lake Forest, IL)
|Maintenance, repair and operations (MRO) products and services
|ManpowerGroup (Milwaukee, WI)
|Human resources services
|Pacific Gas and Electric Company
(San Francisco, CA) www.pge.com
|Public Service Enterprise Group, Inc
(PSEG, Newark, NJ)
|United Rentals (Greenwich, CT)
Back to Top