Diversity MBA Magazine - April 2008 - (Page 60) Supplier Diversity – Programs & Practices successful. Consider a strategy such as US Cellular, where, according to Noel, “Diversity is part of the organization’s core competencies and is a section which fits in with how we use our dynamic organization business model.” Large companies such as BP International “have supplier diversity embedded inside the procurement department so that the Chief Procurement Officer or your Vice Presidents embrace it as part of the strategic sourcing process,” says Deborah Jennings-Johnson, director of supplier diversity. It’s very important that your program is integrated into your policies and procedures and is part of the process. You need leadership buy in; it must be integrated into the supply chain along with established goals that are monitored and tracked” said, BP International. So set targets and goals and report on them periodically with your executive team. • Educate both internally and externally: Working to educate women and minority owned businesses at every opportunity on how they can better position themselves to do business with your organization. “At US Cellular, we educate both procurement professionals and other people within the organization so that they are aware of supplier diversity and how they can increase the minority and women owned companies that are recruited into the supply chain” says Hornsberry. You should also provide the education so they can understand the benefits. • Have opportunities clearly outlined: Having clearly outlined supplier diversity opportunities increases awareness within the organization and helps to implement more changes. Demonstrating the value diverse vendors bring such as reduced costs, and innovative thoughts and ideas, help companies realize that diversity of thought helps to increase corporate efficiency. • All goods and services should be on the table: “Nothing in regards to the things that organizations buy is excluded. This means that professional services such as mutual funds, hedging, financial services are not off the table” says Hill. Minority vendors provide more than widgets and janitorial services. The program should be tied to your sales process. It should be holistic. • Participate in outreach to certifying organizations: Become involved with community organizations that promote, support, and certify MBEs and WBEs such as CMBDC, NMSDC, and Chicago United to meet suppliers who have the scope and capability to meet your organization’s needs. That means building the relationship, and informing them of your requirements, and just being in the right place to meet the kind of supplier that you want to bring into the organization. Those organizations really champion the efforts of small-, women-, minority- and veteran-owned businesses. 60 w w w. d ive r s it y mb a ma g a z in e. c o m • Maintain connectivity between Tier 1 and Tier 2 suppliers: Tier 1 requires significant scale, such as a general contractor who builds the building. The subcontractor would be a Tier 2 supplier. The goal of Tier 2 suppliers is to build capacity so they can grow into Tier 1 opportunities. An example: “We buy cell phones through Motorola, and request that they incorporate diversity supplier in their supply chain, says Ruby McCleary, US Cellular supplier diversity manager. “That means that Motorola is a Tier 1 supplier. When US Cellular contracts with the Tier 1 supplier, our RFP contract language spells out our supplier diversity initiative. Thus if we are unable to directly award a minority-owned business, we request a second- tier opportunity for them” Companies with a second-tier program often include a direct link between the second-tier suppliers and ultimate customer. This ensures connectivity is maintained between the minority businesses and the largest corporations. The fundamental goal of a worldclass program is to help second-tier MBEs build capacity to advance into first-tier positions. Participating in programs like the National Minority Supplier Diversity Council’s (NMSDC) Circle of Excellence, helps to develop suppliers who are serving the economy by employing people from their own community. How Small Businesses Can Participate Small companies must find opportunities of scale and build relationships with potential corporate customers. People do business with people they like and trust. Participating in committee or volunteer work creates and fosters supplier-customer relationships. Good corporate initiatives encourage people to work with diverse businesses, so that small businesses have equal opportunities to participate in the process. MBEs should embrace strategic alliances by collaborating with other MBEs to pursue larger contracts. A Note To Corporations CEOs who have direct interaction with minority business-owners and leaders understand the challenges MBEs encounter, and the value of inclusion. Strong engagement of the CEO, COO, president, and other senior managers is essential for program success. If a CEO visits the issue of supplier diversity on only a quarterly basis, the program will fail. It must be a business imperative that drives value for the larger corporation and benefits for the minority business.The program must be tied to compensation; when greater inclusion of minority businesses is part of the compensation package, it will become a greater priority. In those situations, risk aversion decreases as goal achievement is rewarded, and the result is greater supplier diversity action at all management levels. ■ http://www.diversitymbamagazine.com
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