TAKING CREATIVE LICENSE.

Here's how Minority Suppliers are Flourishing Despite Obstacles

it's been a tough fight. But it's one that minority-owned business enterprises (MBEs) seem to be winning. This business segment is growing faster than ever--despite corporate downsizing, the reduction of the supplier base known as "strategic sourcing", and fewer and fewer government set-asides.

The volume of goods and services purchased by large U.S. corporations from MBEs has grown dramatically over the past year. The National Minority Supplier Development Council (NMSDC) reports that minority purchasing reached almost $50 billion in 1999, a 18% increase over $41.0 billion in 1998, the latest year for which data is complete.

What's happening here? How can MBEs be flourishing, when many are too small to be national suppliers and only an elite number are Tier I or Tier II suppliers?

It seems to be a combination of factors: More aggressive corporate minority purchasing programs; the growth of Tier II supplier initiatives; partnerships between "primes" and MBEs; and joint ventures between MBEs themselves. It all comes down to a strong economy, supplier excellence and, above all-"creativity."

"Creativity" is Key

According to purchasing experts everywhere--from the NMSDC to J.C. Penney and Equiva Services L.L.C., part of a U.S. alliance of Shell, Texaco and Saudi Aramco--creativity is what is enabling companies to expand their minority supplier base, and it is also what is enabling MBEs to grow their businesses.

Examples of such creativity include revamped purchasing programs; more stringent guidelines for purchasing from minority and women business enterprises; partnering; and expanding existing relationships.

The commitment of a company like Equiva says Reg T. Weber, Jr., manager of minority purchasing, can be seen in its policies: "In all bids, we have one minority or women-owned business enterprise," he says. That rule holds true whether the contract is subject to open bidding or negotiation only.

Companies like Equiva are also trying to cultivate existing suppliers to help them expand and move to another level. Pala Interstate, for instance, is a minority-owned construction company that has handled road work in Louisiana. Now Equiva plans to "grow the relationship" by hiring Pala Interstate for projects outside of that state.

Joint Ventures Can Work

Joint ventures are another major trend. Many corporations today are taking the initiative to put minority suppliers together to form a larger critical mass. "It takes a lot of creativity, time and effort to pair up MBEs," says Equiva's Weber. "But when it works, they can form a joint venture strong enough to compete effectively with a national `prime.'"

Suppliers may also gain an advantage through special expertise or niche marketing. Art Avila, manager of supplier diversity at J.C. Penney, says that in retailing the primary suppliers may get so involved in providing all the basic products to the company that "the fashion side of the house tends to be ignored." This may open the door for an MBE with special fashion products.

What can minority companies do to improve their chances of selling to the largest, most established companies? Here are a few tips from experts in this field.

Key Success Tips

* Certification. Make sure your company has certification as a minority-owned business (51% minority-owned) on as many levels as possible--state; city; Small Business Administration; regional and national minority supplier councils.

* "Commercial Business Report." Check to find out whether your Commercial Business Report is accurate. Call the regional office of Dun & Bradstreet (D&B). Large corporations frequently access D&B's database of minority or women-owned business enterprises, the largest of its kind in the country, when looking for minority suppliers.

* Company database. Companies are beginning to encourage electronic registration of minority suppliers. This can save you time and money.

* Electronic RFPs. Soon, companies will be posting their Requests for Proposal (RFPs) on their websites. Downloading the RFP can give you a head-start.

* Explore joint ventures. Let companies know you are willing to partner to win larger contracts.

FEDERATED 

For more than a decade we have successfully operated our Minority Vendor Development Program, providing opportunities for minority-owned and women-owned businesses to supply goods and services to Federated Department Stores Inc. In 1999 alone, we procured $186.9 million from certified minority-owned businesses and $116.5 million from certified women-owned businesses, and the program continues to grow.

The mission of our Vendor Development Program is: "To foster a system of purchasing that allows the corporation to meet its needs and goals and create an effective, fair and considerate arena of competition which includes all possible sources." Our program seeks qualified minority-owned and women-owned vendors and suppliers to become potential business partners with Federated to deliver the products and services that will aid us in achieving our corporate objectives. At the same time, it is our hope that this relationship will foster the growth and development of our business partners, as well as the communities we serve.

Building upon the success of our Vendor Development Program, we are continuing to explore new areas of opportunity to become more inclusive in our supplier base. Whether it is operating supplies, merchandise or store construction and remodeling, we are seeking to develop partnerships that are mutually beneficial.

Federated has even expanded our program to reach minority vendors who may not have the resources to deal with us directly. For example, we might purchase our office supplies from a large chain store in which a minority vendor may actually have provided the pencils received in our order. In addition, we also encourage our suppliers to joint venture with minority vendors.

Federated will also participate in a number of conferences and business expos which will create additional opportunities for us to meet suppliers throughout the year. Working with organizations such as the National Minority Supplier Diversity Council, the Urban League, as well as regional and local organizations, we are determined to build upon and expand our relationships with minority-owned and women-owned businesses.

At Federated, our Minority Vendor Development Program is more than good will. It is good business.

PEPCO 

Doing business with minority business is a normal part of Pepco's purchasing process, just as equal opportunity is for employment. Rhonda Gebicke, Pepco Manager of Minority Business Development says, "The value of diversity in every aspect of our business is our greatest strength. Who we do business with and how we do business is of increasing importance in a competitive marketplace."

Corporate commitment to minority business in 1999 resulted in $145 million dollars spent with minority businesses, an increase of $53 million over 1998. During 1999 all coal contracts were awarded to minority fuel brokers.

Pepco spent $23 million with non-minority women owned firms, an increase of $3 million over 1998. Since 1987, Pepco has spent $1.4 billion with minority and protected class suppliers.

Gebicke points out that "contacting Pepco's Minority Business Development representatives can save time and money. We can tell you what Pepco buys, how Pepco buys, and where the need for products and services exist in the company."

She also adds that while there are additional requirements such as capability statements, financials, insurance, equipment, material listings, etc depending on the type of business - but before you fill out or send in any paperwork - find out the level of opportunity and where you should target your marketing efforts.

We think this process helps businesses determine if Pepco is the right market and provides the roadmap to get started.

Pepco received the Edison Electric Institute Minority Business Development Chairperson's Award in 1999 for its corporate policy, commitment by senior management and organization-wide activities. Pepco was singled out for its investment in business areas such as fuel purchasing.

JOHNSON & JOHNSON

Johnson & Johnson last year spent a record $353 million with minority - and women-owned businesses, a 23 percent increase over the previous year. Part of its continuing commitment is to create a diverse supplier and customer base. "Over the years, our broad and diverse supplier base has brought us many benefits - cost efficiencies, innovative ideas and critical enhancements to quality. When our company closely reflects on the wide-ranging perspectives and values of the world in which we live, we enhance out relationships with that world and we enrich our own environment," says Ralph S. Larsen, chairman and CEO of Johnson & Johnson.

Johnson&Johnson, with approximately 97,800 employees, is the world's most comprehensive and broadly-based manufacturer of health care products, as welt as a provider of related services for the consumer, pharmaceutical and professional markets. It makes MWBE suppliers accessible to all of its U.S.-based operating companies through the corporate Supplier Outreach Program

An automated program at the corporate headquarters in New Brunswick, N.J., it identities and categorizes suppliers by ethnic breakdown, commodity, affiliates, and geographic distribution. Every employee can use the electronic database to search for a supplier, based on specific needs

Johnson&Johnson has outreach efforts to identify minority- and women-owned suppliers and the company educates employees about its services. The company also shares information through the company Intranet, and through company-sponsored networking events. In addition, each operating company of Johnson&Johnson appoints a liaison to go into the local community and identify MWBE suppliers to serve the local company's needs.

"Our activities within local communities are only the beginning of our outreach program. We also encourage all of our major suppliers to, in turn, identify and work with minority- and women-owned business partners as they provide goods and services to our operating companies," says Teresa Fedec, director, strategic sourcing at Johnson & Johnson.

AMERICAN AIRLINES 

AMR Corporation's Diversified Supplier-Program was established in 1989 to foster opportunities for minority and women-owned businesses to do business with AMR companies. In an average year, nearly 600 diversified businesses utilize the program to evaluate opportunities and identify potential customers. A database of current, and prospective, certified diversified suppliers interested in providing products and services to AMR is shared across the organization on a corporate Intranet. The program also serves as a liaison between the diversified supplier and their potential customer(s).

Purchasing, once a tactical activity, is being transformed to a highly strategic function through the implementation of best practices and the evolution of technology. Commodity managers, once focused on "low bid," now focus on managing supply chains to ensure the lowest total cost of ownership. The use of e-commerce in the corporate setting, once restricted to online requisitioning and electronic data interchange, is being transformed through new technologies such as on-line auctioning and the e-marketplace. E-marketplaces can help purchasing departments further reduce their cost of doing business through increased choice and price competition.

As major corporations move forward to develop or join on-line marketplaces, those suppliers who wish to continue doing business with them must do the same. Suppliers that have lagged in developing e-commerce capabilities were left out of the $114 billion B2B market in 1999, and stand to lose even more, as the market grows to over $2 trillion in 2004.

Suppliers can increase their competitive edge by developing an e-commerce strategy and action plan to establish, at the very least:

* an Internet presence;

* an on-line catalog; and

* a secure server for the conduct of transactions over the Internet.

While development of a comprehensive e-commerce strategy presents a challenge to all suppliers, it is a particularly daunting one to diversified suppliers who often do not have the infrastructure to support such an undertaking. The AMR Diversified Supplier Program works closely with local ethnic chambers of commerce and other organizations to elevate the visibility and understanding of B2B e-commerce to encourage suppliers to develop their e-commerce abilities and remain competitive in the new millennium.

JOHN DEERE & COMPANY

Deere & Company is creating greater opportunities for minority-owned and women-owned businesses as it builds its global supply chain.

Besides revitalizing its long-standing minority supplier program with senior leadership and increased resources, Deere is incorporating minority supplier goals and measures in its strategic sourcing efforts.

Deere is also pursuing supplier development strategies aimed at increasing the competitiveness of the entire global supply chain. Its supplier development initiative provides engineering and training resources to help small businesses.

At Deere, "global" means not only geography, but also tapping the ideas and expertise of all cultures and business categories. Deere's worldwide expansion and customer focus has led it to actively search for and find ways to use diverse points of view capabilities and experience to align its businesses with customer needs.

Deere is the world's leading maker of agricultural equipment--the owner of the famous John Deere brand--and a leading manufacturer of construction equipment, engines and transmissions, and lawn and grounds care equipment. The company wants minority suppliers in both direct and indirect materials to support its many products, which include tractors, combines, backhoes, crawlers, lawn equipment, utility vehicles and generators.

Minority businesses are also needed to provide such services as recruiting, trucking and logistics and printing, according to John Hudson Director, Supplier Diversity in the supply management area. "Our needs tend to be capital-intensive in the manufacturing and assembly areas, and it's important our suppliers achieve global competitiveness as well, since 20 percent of our business is overseas sales," Mr. Hudson said. Minority businesses with the capacity and desire to stay abreast of e-commerce developments, using technology and breakthrough thinking to solve business problems, are especially valued.

Information on doing business with Deere is available from Tad Birditt at Deere & Company at [phone], or, by e-mail to Birditt [e-mail]

BOISE CASCADE 

For more than 20 years, Boise Cascade Office Products has been at the forefront of supplier diversity. In the office products industry, Boise created the mold.

Back in the 1970s, Boise Cascade started diversifying its supplier base voluntarily without any government, competitive or customer mandates. In fact, Boise sourced virtually all of the minority-and women-owned manufacturers used in the office products industry today.

Recently, Boise's Supplier Diversity Program was among the first to include companies employing disabled veterans and those with physical challenges.

And now Paul E. Ruffin is helping Boise raise the bar. Ruffin, Corporate Manager of Minority and Women Business Development and Supplier Diversity at Boise, has developed several new initiatives that promise to keep Boise out in front.

He organized and chairs Boise's Executive Council for Diversity, an internal team of eight senior executives, including President and CEO Christopher C. Milliken. The group addresses issues and makes decisions that impact diversity in every area of the company.

"This initiative illustrates just how committed senior management is to supplier diversity," said Ruffin, who reports directly to Executive Vice President of Marketing David Goudge. "In every area of supplier diversity, I have a real listening ear," he said.

Boise's new National Diversity Customer Quality Council is an industry first. Ruffin brought together several Fortune 500 clients and some MWBE suppliers for frank and honest dialogue on real issues concerning both groups. The face-to-face meeting has resulted in a commitment to ongoing discussions.

MWBEs in Boise's second tier program are enjoying several innovations, most notably, marketing and promotional support. Boise now includes a message about minority vendors in every promotion. Plus, MWBE suppliers are highlighted in Boise's big catalog and on the website, www.bcop.com, where customers can place direct orders. MWBEs are also featured in a special Supplier Diversity Program publication.

Said Ruffin, "At Boise, we're re-creating the supplier diversity mold."

DELTA AIRLINE

The airline industry is constantly changing to meet customers. These changes impact business operations and are requiring Delta to implement a quality process to better manage the total costs within its supply chain. Delta has embarked on a course to maintain a competitive edge in the global marketplace today and into the 21st century by maximizing value through strategic partnerships. Successful partnerships with minority business enterprises (MBEs) are key to this new business environment. The values these partnerships bring are increased competitive advantages, improved quality, and significant improvements in profit margin.

Increasing minority-owned business participation, for all corporations, is a challenge in a time of contract consolidation and supplier reduction. How can two seemingly conflicting strategies be brought into balance with supplier diversity initiatives? Despite the challenges, Delta is seizing the opportunity to create solutions that allow MBEs to form partnerships through strategic alliances, consortiums, second tier, joint ventures and mentoring relationships. However, in order for MBEs to move their company from exclusion to inclusion in this competitive procurement environment, they must meet strategic long-term goals and bring their best to the table.

In the current and future business climate, MBEs must have strong management teams to guarantee quality products/services and prepare for business expansion for future projects. No longer are we interested in lowest price alone. As Delta enters into the new millennium, we want suppliers that help create and maintain a competitive position in terms of innovation, quality, price, and on-time delivery. These attributes represent a balanced mix of services in which the partnership finds new creative ways to utilize each other's resources.

Another key resource is technology, which is bringing buyers and suppliers closer together. New technology alone will not suffice to gain new contracts. However, as the computer becomes a more important business tool, MBEs' integration into e-business and other Internet products and services will allow for additional opportunities. Blending these and other resources into a customized, cost-effective partnership will consistently generate value well beyond traditional transactional relationships.

Delta continues to explore strategies to leverage needed resources and support for increased opportunities for minority enterprises. In our continued efforts, we are committed to identifying and forming effective business partnerships with MBEs.

TELLABS

Tellabs, headquartered in Lisle, Ill., is a global provider of telecommunications products and solutions. Tellabs' ProPartner Alliance[TM] is an initiative for integration and retention of certified minority, women and disabled veteran business enterprises (M/W/DVBEs) in company-wide contracting and procurement activities. An aggressive approach to achieve a diverse supplier base includes three components: supplier purchasing, supplier development, and a value added reseller program.

Direct supplier purchasing involves purchases of materials and services from M/W/DVBEs directly related to the production and deployment of products in Tellabs' product portfolio. Typical purchases include acceptance testing and turn-up, components manufacturing and assembly, design and engineering, installation, network construction, system integration, transportation, and warehousing. Indirect purchasing consists of purchases of supplies and services used in the day-to-day operations of Tellabs.

Supplier development is an innovative approach to strengthening participation of certified M/W/DVBEs in contracting activities. Tellabs' supplier development ensures the availability of a sufficient number of qualified M/W/DVBEs capable of providing quality products and services. Supplier development relationships exist via partnering, mentoring, and incubation programs.

The ProPartner Alliance Value Added Reseller (VAR) Program is a cost-effective and efficient means of deploying Tellabs' products. Value is added with diverse supplier firms providing business solutions such as reduced costs, reduced cycle time, or customization.

"Tellabs endeavors to partner with the `best of the best' suppliers who focus on improving our competitive advantage," says Tellabs Supplier Diversity Manager Kimberly Johnson.

The global solutions provider designs, manufactures, markets and services data, voice and video transport, switching/routing and network access systems that are used worldwide by the providers of communications services. It employs more than 7,000 employees in 60 locations worldwide.

Tellabs was named to Fortune's 100 Best Companies to Work for in America, a distinction that is largely based on employees' opinions and reflects Tellabs' belief that its success is driven by the talent, diversity and creativity of its people. That belief extends to its suppliers.

WENDYS

The impact of e-commerce is being felt throughout all industries in some form or fashion and will definitely create opportunities as well as challenges for businesses as we go through this learning curve. Even though e-commerce will have a critical influence in our future, for Wendy's and our Supplier Diversity strategy, building long-term relationships is still critical for our success.

Mr. Thomas (Dave) opened the first Wendy's over thirty years ago with a goal to serve the best hamburgers by staying focused on the fundamentals of the business. Those fundamentals of quality food, excellent service, total value and a sparkling clean atmosphere still hold true today. In selecting a supplier to join our team, we base our decision on those same basic business fundamentals. We, of course, determine if there is a need for a specific product or service within our strategic commodity areas, but more importantly we look for the ability of those suppliers to meet our business and relations expectations. Our involvement with our suppliers does not stop there. Wendy's is a team-based company and with any team you look for growth. With our existing suppliers we look for ways either internally or externally to expand our market share, improve quality, increase productivity and reduce cost.

Everyone from our employees, suppliers and franchisees plays an important role in our success. As Mr. Thomas (Dave) so aptly stated, "We can accomplish a lot more as a team than as single individuals. This is a `we' company." Every year new tools, such as e-commerce, will be developed to support operations, etc., but while we integrate new technology into our system, we will always keep an eye on maintaining a strong foundation by executing the basics of our business.

GTE 

Spectra Communications Group Makes History with GTE Deal

Dorothy Rollins made telecommunications history last year when her company, Spectra Communications Group, L.L.C. became the first African American-controlled local exchange company in the United States. Spectra achieved this history-making milestone when it agreed to buy 116,149 telephone access lines in Missouri from GTE. The transaction includes 138 GTE employees in Missouri who will work for Spectra. This deal is part of GTE's initiative to sell approximately 1.6 million of its telephone lines in the United States.

Spectra Communications Group is composed of CenturyTel, the Missouri-based Local Exchange Carrier (LEC) and Spectronics Corporation. Led by an African American board of directors with Rollins as board chair, Spectra leverages the experience of all three companies--Spectronics, a full-service telecommunications contractor that specializes in systems design, engineering and construction for voice, data and cable networks, CenturyTel, a large, experienced local exchange service provider, and LEC is a smaller but experienced provider of local telephone service in Missouri. Collectively, these telecommunications experts have positioned Spectra to make a keen difference in the marketplace.

"Spectra will offer local, personalized service to create new relationships with its customers in Missouri. We are confident our commitment to excellence will enable Spectra to provide the caliber of service to customers in Missouri that they've come to expect from GTE," said Rollins.

"This is a landmark supplier diversity success story that we're very excited about," said Oscar Gomez, GTE vice president of Diversity Marketing and Management. We know that when we diversify our relationships in the marketplace, great things can happen."

Approval of the sale is required by the Missouri Public Service Commission, the Federal Communications Commission, and the U.S. Department of Justice. The closing of the sale and transfer of GTE operations to Spectra is expected to be complete in 2000.

In addition to its agreement with Spectra, GTE announced plans to sell 61,612 customer access lines to Telephone USA of Wisconsin, L.L.C., an African American-controlled business, and over 500,000 customer access lines to Valor Communications, a Hispanic-controlled business. These sales are also expected to close in 2000.

If you're a supplier interested in doing business with GTE, please call 1-800-347-1508 or visit www.gte.com/supplierguide.

TRICON 

Small business remains at the very core of the American economy, providing the entrepreneurial spirit that fuels the free enterprise system. Tricon Global Restaurants Inc., parent company of KFC, Pizza Hut and Taco Bell, believes that franchise, supplier, and employment diversity is an integral part of its business growth. In 1999, representatives of Tricon, the KFC National Purchasing Cooperative, Inc., and Tricon's KFC, Pizza Hut and Taco Bell franchisees formed the Unified Foodservice Purchasing Co-op (UFPC) for restaurant products and equipment in the United States. The UFPC operates independently and is jointly governed by representatives of KFC, Pizza Hut, and Taco Bell franchisee groups, along with Tricon.

In an on-going effort to increase its minority and women supplier base, Tricon is a corporate member of several national professional minority and women organizations, including the National Minority Supplier Development Council, The Women's Business Enterprise Council, and the United States Hispanic Chamber of Commerce. These groups, along with regional purchasing councils and minority chambers of commerce, are key resources for identifying minority and women suppliers.

The mission of the Tricon/UFPC Supplier Diversity Program is to develop and facilitate strategic relationships with minority and women-owned business enterprises (M/WBEs) which reflect a commitment to the communities they serve, their customers, and their shareholders. Through these efforts, the program works to advance the economic strength of communities where Tricon does business, while acquiring the high-quality products and services needed to operate the business.

The Tricon/UFPC Supplier Diversity Program is designed to:

* Actively and diligently seek out qualified minority and women vendors for all possible company requirements

* Provide essential links between diverse suppliers and corporate departments with purchasing needs

* Implement practices that insure each qualified M/WBE supplier has an equal opportunity to compete and participate- according to established policies and procedures 

For more information and a list of Tricon/ UFPC purchased goods and services, please contact Renee Fromme, at the UFPC at [phone], or Richard-Abraham Rugnao, at Tricon at [phone], ext. 8926.

PITNEY BOWES 

Pitney Bowes, the $4.4 billion messaging industry leader, has a long tradition of commitment to minority and women-owned business supplier development.

The company's market and technology driven business diversity initiatives include a focus of using MBEs to provide technology products and services. One example is the recent multimillion-dollar deal with an MBE to provide laptops to Pitney Bowes. Accordingly, the company's strategy creates opportunities in non-traditional/emerging niches where MBEs can be more competitive and face lower barriers to entry.

Pitney Bowes is also developing a web-based MBE registration process to facilitate access to potential minority suppliers. Once completed, this site will allow MBEs to complete the entire registration process online, and offer internal purchasing departments the ability to review the entire database for potential purchase opportunities.

Pitney Bowes has a growing portfolio of web-enabled products and services ranging from electronic billing and payment (docSense.com), to secure

electronic document delivery (iSend.com), to online document sharing, management and storage (expedocs. com).PitneyWorks (PitneyWorks.com), offers a suite of solutions specifically for small businesses including ClickStamp[SM] Internet postage and ValueShip[TM], an Internet shipping service that determines the most cost-effective and timely way to send mail or packages overnight. PitneyWorks also provides direct marketing software, services, and financial solutions to help small businesses enhance their cash flow management and finance critical business needs.

Business diversity is a factor on which Pitney Bowes' business units' annual performance and financial bonuses are based. In 1999, the company spent $32 million with minority businesses, an increase of 18% from the previous year. Pitney Bowes partners with minority businesses and trade organizations across the country and continues to build those relationships on a regional basis and national.

US WEST

In 1999, U S WEST spent a record $513 million on purchases from minority- and women-owned business enterprises (M/WBEs), a 35% increase over the previous year and a 55% increase over the past two years. For one of the nation's largest communications service providers, the unprecedented spending was part of its long history of diversity and inclusion.

Denver-based U S WEST has been aggressive in seeking out M/WBEs that can complement its broadband and communications products and services, as well as areas such as financial and business support.

"Minority- and women-owned companies are the fastest growing segment of the business population, and they will be the economic powerhouses of the future," says Solomon D. Trujillo, chairman, CEO and president of U S WEST. "By using a supplier base that mirrors our customer base, U S WEST increases shareholder value, keeps and wins customers, creates jobs and makes life better here within our 14 states."

Among contracts recently awarded by U S WEST are a $55 million order for 4,500 Ford fleet trucks to Burt Automotive Group and a $10 million contract with Majestic Management Inc. for U S WEST-designed connectorized cable. On the financial management side, nearly $12 million of U S WEST's pension funds are managed by the Sloan Financial Group.

"The strategic importance of M/WBEs in helping U S WEST create new products and services and in creating new markets cannot be ignored," says Sylvia J. Palms, US WEST vice president for supplier diversity. "These firms are coming to the table with business solutions, many of them are Internet ready and they're competitive."

The reasons for U S WEST's success with its minority and women's business initiative are rooted in its values and marketing strategy. Supplier diversity has been integrated into the Procurement organization. Managers in both organizations have yearly bonus plans tied to achieving double-digit percentage increases in M/WBE spending. And suppliers are expected to have subcontracting plans. For more information, visit the U S WEST Supplier Diversity Website at www.uswest.com/com/mwbe.

STATE FARM

State Farm's business partners are key players in helping the company honor the commitment it has made to provide friendly, helpful, personal service to its policy holders. We want to develop partnerships with suppliers that share our goal of furnishing that service.

State Farm's customers are a diverse group, and we want our supplier base to include businesses just as diverse. That's why we make a special effort to include minority owned, women-owned and physically challenged-owned businesses in our supplier selection process.

We do this through our Supplier Diversity Program. Everyone in the company who has purchasing responsibilities is encouraged to seek minority-owned, women-owned and physically challenged owned businesses that meet our standards for quality, service and price.

Interested in participating in the program? Here's how it works.

First, call a supplier diversity coordinator in State Farm's purchasing department at [phone]. The coordinator will ask for general information about your company, then mail you a profile form to complete and return.

When we receive this information, we will enter it into our supplier diversity database along with facts on the products and services your firm provides. When purchasing department employees and other prospective buyers within State Farm access this database, they'll be able to search for businesses that furnish your products and services and select the ones that best fit State Farm's needs.

State Farm has long been dedicated to serving a diverse customer base and to providing equal opportunity in its selection of employees and agents. We want to do the same for minority-owned, women-owned and physically challenged-owned businesses ... and the Supplier Diversity Program will help us reach that goal.

UNITED AIRLINE

Unite Airlines, in its 74th year if service, is the largest passenger/cargo carrier in the U.S. In 1999, we carried more than 87 million passengers and flew nearly 3.1 billion cargo ton miles. United flies more than 238,368 passengers each day to 138 destinations in 26 countries on our 2,382 scheduled daily departures.

United established its Minority Business Program in 1968 and was one of the founding corporations of the Chicago Minority Business Development Council (CMBDC) in that same year. Over the years the program has evolved from a social initiative to an integral part of our procurement process, company-wide. The main purpose of our current program is to increase the amount of our "first tier'" purchases of goods and services from certified minority and women-owned businesses. This continuing evolution also led us to co-author the "World Class Standards in Minority Business Development" with the CMBDC. The model is a continuous improvement process, utilizing accepted business strategies that have been implemented by leading corporations.

In light of the inevitable changes facing the procurement industry (downsizing strategic sourcing and e-commerce), it is a real challenge to maintain and increase the amount of purchases from our diverse suppliers. Despite these realities, United is committed to pursuing creative ways of keeping competitive suppliers in the procurement cycle. One technique has been to utilize a more strategic sourcing approach in matching qualified suppliers with some of our major procurement needs. We successfully employed this technique recently with executive firms and food product manufacturers.

Additionally, in order to facilitate supplier identification and communication, we will be utilizing the United website.

The site will allow us to register certified minority and women-owned businesses into our database and to post upcoming Request for Proposals. We expect our supplier diversity information to be on the United site later this year. United is also in the beginning stages of implementing an e-commerce infrastructure that will eventually impact the majority of our procurement transactions and processes. For more information, contact: Sandra Rand, Supplier Diversity Manager, [phone] E-mail: [e-mail].

TOYOTA

The Supplier Diversity group, located within Toyota's Purchasing division, acts as a liaison between MBEs and Purchasing by reviewing certification and potential supplier capability of minority companies. After this assessment, the Supplier Diversity group puts MBEs in direct contact with the appropriate buyer(s) at its manufacturing headquarters in Erlanger, KY, or refers the MBE to the appropriate personnel at one or several of Toyota's Manufacturing locations across the United States. The above process flow sppports Toyota's efforts to meet and potentially exceed stated 5 percent Tier I and 5 percent Tier II sourcing initiatives by the year 2002.

As a Tier I supplier, Minority Business Enterprises will need to have e-Business capabilities to support a new purchasing system, scheduled to launch this fall. The initial introduction will cover Tier I parts and component suppliers. The supplier interface is a secure, web-based internet application which will benefit parts & components suppliers by expediting our communications and improving data accuracy. We see the e-Business environment as one tool to assist the business process. So as Toyota moves forward, we expect our suppliers to move with us, in a way that optimizes the benefit for both of us.

Toyota's challenge to our suppliers to also achieve a 5 percent target is not just words. To facilitate progress toward the Tier II sourcing target, Toyota holds its annual Opportunity Exchange, a one day event which includes a seminar, luncheon, and tradeshow designed to facilitate relationships with over 200 of Toyota's Tier I suppliers and MBEs from across the country. The first Opportunity Exchange had only 100 participants generating $350,000 in contracts. Today, the event attracts over 1,200 participants and has generated more than $20 million in new contracts since the events inception. The event is held at no charge to all participants. Opportunity Exchange has featured keynote speakers such as Earl Graves, Susan Taylor, Kweisi Mfume, and Tavis Smiley who have addressed diversity related issues. This year's event, which will mark the 11th year, will be held November 15th at the Cincinnati Convention Center in Cincinnati, Ohio.

SEARS 

At Sears, vendor diversity is an important business imperative offering opportunities for thousands of minority and women owned sources. As the second largest retailer in the country, Sears sells more than $41 billion in merchandise and services to customers across the country each year.

Minority and women-owned businesses play an important role in the company's supply chain. Last year, total purchases from minority and women owned businesses rose 34 percent as the company continued to pursue a business strategy that recognizes the importance of a more diverse vendor base.

An inclusive vendor base can create competitive advantages. Often, the most competitive products, services, costs and innovations come from a diverse vendor base, a base that reflects our customers, our associates -- and enhances the corporation's bottom line.

As part of the company's efforts to improve our sourcing and develop an inclusive vendor base, Sears is taking a lead in business-to-business Internet purchasing. This spring, Sears and Oracle launched GlobalNetXchange, the first global business-to-business on-line exchange serving the retail industry. We believe this open exchange will greatly enhance supply chain efficiencies with our trading partners and provide even more opportunities for minority and women-owned sources.

Vendors wishing to do business with Sears can learn more about the company and its current application process by visiting the vendor diversity website at www.sears.com.

ENERGY

Sempra Energy and its Diverse Business Enterprise program are committed to diversity

Sempra Energy means business about diversity, because diversity means business for Sempra Energy.

Sempra Energy is a Fortune 500 energy-services company with 12,000 employees and revenues of $5.5 billion. Today, it serves more than 9 million customers in the United States, Europe, Canada, Mexico and South America. These customers are a rainbow of ethnic groups and nationalities.

Committed to diversity

Sempra Energy is committed to diversity. Its leaders believe that the company will deliver the best results and the best shareholder returns if its employees and vendors reflect the communities it serves.

That's why it created the Diverse Business Enterprise (DBE) group.

"We believe that supplier diversity is a smart business strategy that makes us a stronger competitor, more closely allied to our customers," says Shawn Farrar, director of the DBE department at Sempra Energy. "In the last six years, we have spent almost $700 million with minority-owned, women-owned and service-disabled, veteran-owned suppliers. In fact, we have helped mentor and grow several small businesses that have become so attractive that larger companies have wanted to buy them."

Diversity awards

Sempra Energy and its Diverse Business Enterprise program have both received a number of awards for their commitment to diversity.

For two years in a row, Sempra Energy has finished in the top five on Fortune magazine's list of "The 50 Best Companies for Asians, Blacks and Hispanics." Its top-five rankings were based on the company's efforts in hiring, promoting and retaining people of color, as well as for supplier diversity and charitable contributions.

And the Diverse Business Enterprise program received the "Access to Markets" award from the U.S. Secretary of Commerce.

Learn more

To learn more about Sempra Energy's programs that support its commitment to diversity, contact the Diverse Business Enterprise department at 1-800-325-5966 or check out the Office of Diversity Affairs at Sempra Energy's Web site at www.sempra.com.

ENTERGY

If diversity in business is to be more than corporate-speak, then a commitment to a solid strategy for the inclusion of minority--and women-owned firms is essential. Entergy--a global energy company providing electrical power to more than two million customers - has made this principle a top priority for more than a decade, becoming, in 1987, the first electric utility holding company in the nation to commit to the NAACP's Fair Share Principles. Entergy's Supplier Diversity Program has put more than $500 million into circulation among minority and women suppliers and is key in the company's mission to increase business opportunities for growing enterprises.

In the normal course of doing business, Entergy utilizes goods and services from numerous external resources. These external suppliers are the product vendors and service providers who deliver everything from office supplies to electrical components to construction contractors. Entergy's Supply Chain organization oversees this area of its business, ensuring judicious, efficient purchasing and subcontracting policies. The Supplier Diversity Program is an important tool for the Supply Chain group, providing a conduit that connects procurement processes with strategic goals of increased minority and women providers. A multi-level pre-qualification process ensures that prospective vendors and contractors involved in the Supplier Diversity Program are minority- or woman-owned and capable of providing high quality goods and services that Entergy needs to meet and exceed its customer service goals. The Supplier Diversity Program also matches growing enterprises with Entergy's Supplier Diversity specialists to help these entrepreneurs identify any shortfalls and the corrective steps necessary to become qualified supplier candidates.

By identifying and assisting targeted businesses capable of meeting Entergy's various purchasing needs, the Supplier Diversity Program contributes to a consolidated supply chain that creates better values for customers, improved business opportunities and ultimately, stronger, more vibrant communities.

If you would like more information on Entergy's Supplier Diversity Program, call 1-877-484-5949.