The Billion Dollar Roundtable.
In a world of minority purchasing, The Billion Dollar Roundtable (Roundtable) stands out. It is an organization with a clear mission--and clear bottom line for membership. It is made up of public companies that spend over $1 billion each with minority and women-owned enterprises (MWBEs)--and also serves as models for others trying to achieve that kind of spending.
"It is very attractive for companies to be associated with the Roundtable," notes Harriett Hichel, President of the National Minority Supplier Development Corporation (NMSDC). "It recognizes excellence in supplier diversity and gives other companies a target to shoot for."
ORIGINS OF THE ROUNDTABLE
The Roundtable is a relatively new organization. It was founded in 2001 by a triad--Don NcKneely, CEO of Minority Business News, Shirley Harris, formerly V.P. of Diversity for the Altria Group and Sharon Patterson with the aim of "sharing best practices and thinking on how to reach the billion dollar level of diversity spend." The way Patterson puts it today, the Roundtable serves as a "think tank" today on the best supplier diversity practices and future of the field.
As of April 2005, the Roundtable consisted of 12 companies ranging from Altria to Wal-Mart. (See box on page 2). Three more companies were expected to be inaugurated in Hay of this year--Toyota, Hewlett-Packard and Procter & Gamble. That will bring the total of companies with one billion in diversity spend to 15. Those corporations may represent the entire constellation of U.S. companies with a $1 billion diversity spend.
"We were astounded that so few U.S. companies had a billion dollar spend," admits Sharon Patterson, retired diversity executive from Kraft Foods who is now CEO of the Roundtable. She says there may be a few more out there (after this year's members are inducted), but she is hesitant to guess who they are.
The organization fulfills its mandate through its awards ceremonies and roundtables, held every two years, as well as the publication of white papers based on diversity purchasing.
A look at the list of the Roundtable members reveals a strong concentration on telecommunications and automotive--both industries with huge purchasing needs, frequently in areas of new technology. Since there is so much constant change in these industries, legacy providers can't always keep up, and it makes the industries prime candidates for minority businesses trying to get a foot in the door.
TELECOMMUNICATIONS AND HIGH TECH
The telecommunications and/or high tech companies in the Roundtable include AT&T, IBM, Lucent Technologies, SBC Communications Inc., Verizon (and perhaps, in a certain sense, defense contractor Lockheed Martin). The automotive manufacturing group is comprised of DaimlerChrysler, Ford, General Motors, and Johnson Controls, Inc.
How have these companies achieved their $1 billion diversity supplier spend? Each seems to have its own distinctive approach, but at the same time there are commonalties. Here are some of the best practices which executives at Johnson Controls, Inc., IBN, and Verizon say have contributed to their success.
* Incorporate diversity suppliers into all Requests for Proposal (RFPs). Both IBM and Verizon do this. Sam Delgado, Director of Supplier Diversity at Verizon, says this is the most important secret of a successful supplier diversity program.
* Give non-minority suppliers goals for subcontracting with MWBEs. Verizon requests majority suppliers to subcontract 18 percent of their purchasing with MWBEs, although Delgado says that a more common goal for this is 10 percent.
* Create simple reporting structures for non-minority prime suppliers. Verizon requires its non-minority prime contractors to provide quarterly reports on MWBE spending through an Internet portal in order to track whether or not the supplier is meeting its goals. "If they are not maintaining these goals, we have a discussion," says Delgado.
* Use cross-functional teams at the back end of RFPs. Verizon uses a cross-functional team approach when evaluating RFP applications. The teams include sourcing processing leaders and diversity purchasing representatives. "This keeps all the cards out on the table," says Delgado, "And also the voice of the diversity company can be heard."
* Create an awareness program. When Johnson Controls, Inc. launched its minority purchasing initiative 12 years ago, it embarked on a major internal communications program. That effort included brochures, presentations, town halls meetings, newsletter articles, web site information--and more. "We wanted to change the paradigm," explains Reginald Layton, Johnson Control's Director of Diversity Business Development. "We wanted to break the myth that minority suppliers were hard to find and expensive and that customers didn't care about them."
* Take advantage or "benchmarking" resources. When setting up its program, Johnson Controls relied on many of the best practices outlined in NMSDC's instruction manual, found on its web site. "If they said develop advanced program tracking, we did it. After all, we were new to this," notes Layton. By doing this, Johnson Controls ensured that it was using practices that had worked before and which were being recommended by one of the most established organizations in the field.
* Build enhanced accountability tools, metrics and processes. Johnson Controls tracks its supplier diversity spending very closely, quarter by quarter. It does this through a dual level of accountability. Diversity purchasing executives participate in two quarterly reviews with purchasing executives: The buyer's Purchasing Plan Review, as well as an Executive Purchasing Council meeting. By doing this, the diversity executives not only can monitor what is being spent, they also see what is coming for the future. "It helps us prioritize our work," explains Layton." We can be more effective with our minority vendors, since we know what the company plans to purchase."
* Create mentoring programs for your MWBE suppliers. IBM periodically holds 2-day retreat seminars for selected suppliers. Senior executives attend these to listen to top notch speakers who provide information on different aspects of business development and growth. "We want to help them grow their businesses, so they can support us globally, and also expand their reach," explains Michael Robinson, IBM's Program Director, Global Supplier Diversity. "You never want a supplier to be totally dependent on one big client. These seminars help them avoid that."
* Reach out to new MWBE suppliers. Johnson Controls hosts monthly meetings called Straight Talk around the country. In these meetings, company executives lay out the purchasing needs for the next 12 to 18 months and help explain to new suppliers how to navigate the system.
With techniques like this, Johnson Controls and IBM have built exceptionally successful minority supplier programs. The diversity spend of both companies reached $1.1 billion in 2004.
Verizon's diversity spend that year was even larger--$1.78 billion--perhaps due to its new initiative called "Fiber to the premises" (FTTP). This initiative will enable Verizon to transform itself from an old line phone company into to a broad band organization that brings high data streams to homes as well as videos.
"FTTP has opened up a wide range of options for suppliers," says Delgado, since the company is buying more of everything--from digging trenches to laying fiber optic cable underground and installing network interface devices.
This initiative represents an excellent opportunity for minority-owned companies. And it also shows why minority entrepreneurs should be keeping an eve on Roundtable companies. These corporations are leaders in the field of diversity purchasing, and when they expand, they are definitely looking for more qualified MWBEs. So make it your business to know what the 12 companies on the Roundtable membership list are up to--and how to get into their databases for MWBEs--meet their diversity executives--and become better informed about them. Some tips from IBM for becoming a supplier to that company can be found in the box below. Being proactive with these proactive supplier diversity corporations may pay off even sooner than you think.
THE BILLION DOLLAR ROUNDTABLE LEADERS IN MINORITY PURCHASING
As of April, 2005 the Billion Dollar Roundtable had 12 members--U.S. public corporations that spend $1 billion or more on purchasing from on women and minority-owned enterprises.
1. Atria Family of Companies
3. DaimlerChrysler Corporation
4. Ford Motor Company
5. General Motors
6. IBM Corporation
7. Johnson Controls, Inc.
8. Lockheed Martin Corporation
9. Lucent Technologies
10. SBC Communications Inc.
11. Verizon Communications, Inc.
12. Wal-Mart Stores, Inc.
TOYOTA MOTOR MANUFACTURING NORTH AMERICA, INC.
Toyota's commitment to minority business development is evident in its increased spending with MBEs and in the numerous award recognitions the company has received. 2004 was a remarkable year for Toyota's Supplier Diversity Program. The automotive manufacturer was recognized for its achievements in the minority business community with two of the most distinguished awards within the supplier diversity arena. Becoming the first company to win both awards in the same year, Toyota received the Minority Business Development Agency's (MBDA) Distinguished Supplier Diversity Award and the National Minority Supplier Development Council's (NMSDC) Corporation of the Year Award. The company's guiding principles of continuous improvement and respect for people are put into practice through Toyota's Supplier Diversity initiative, which offers Toyota and its suppliers innovative solutions to complex problems and an advantage over their competitors.
If you are an MBE interested in supplying the needs of automotive customers, mark your calendar for this year's Toyota Opportunity Exchange minority business trade show & conference. This one-of-a-kind event will be held in the Greater Cincinnati area on Wednesday, November 30th. For more information about Opportunity Exchange, please visit Toyota's website at www.toyotasupplier.com and follow the links to Supplier Diversity.
Under the leadership of T. Williams, who manages Toyota's Supplier Diversity Program, the company expects to achieve both its Tier I and Tier It MBE purchasing targets in 2005. Based on that expectation, Toyota's combined spending with MBEs should reach $1 billion by year's end, enabling the automaker to join the prestigious Billion Dollar Roundtable, a group of corporations that spend at least $1 billion annually with minority-and women-owned suppliers.
The 2005 Opportunity Exchange will be held on Wednesday, November 30th in the Greater Cincinnati area. For more information about Opportunity Exchange and Toyota's Supplier Diversity program, please visit the company's website at www.toyotasupplier.com.
NEW YORK LIFE INSURANCE
For successful companies like New York Life, diversity is the foundation upon which their cultures are built. In fact, over half of our employees are female and over one quarter are minority. By bringing together a diverse mix of talented people, we foster innovation and creativity. New York Life considers its commitment to diversity a key strength and an essential component to achieving long-term business objectives. This philosophy goes hand-in-hand with our corporate values of financial strength, integrity and humanity.
In addition to maintaining our commitment to a diverse work force, we promote the same inclusive standards in the selection of our suppliers and vendors. The New York Life Supplier Diversity Program is designed to provide more opportunities for minority-owned and women-owned business partners who, in turn, can help us provide even better value and service to our customers. We are proud of the progress we have made in this endeavor and are committed to building on this success.
The policy of our Supplier Diversity Program is to diligently seek out and include certified minority- and women-owned business enterprises (M/WBEs) in our procurement processes. And, in exchange for the competitive pricing, high quality and exceptional service that we expect from our supplier base, suppliers can expect the following from us:
* We will apply the same business standards and expectations uniformly to all suppliers competing for our business.
* We will award business to those suppliers who can offer cost effective solutions to our business needs at the best overall value.
* We will demonstrate respect, honesty and fairness in the way we do business with you.
The program has the enthusiastic support of New York Life's chairman and chief executive officer, SV Sternberg. Some of our current initiatives involve exploring innovative approaches to include M/WBEs in non-traditional areas like food management services, insurance providers, and energy supply companies. We will continue to expand our customer base for M/WBEs and participate in activities that will introduce the company to new M/WBEs.
We invite you to learn more about our Supplier Diversity Program by visiting our website at http://www.newyorklife.com/supplilierdiversity.
JOHNSON & JOHNSON
Johnson & Johnson, the manufacturer of health care products for consumer, pharmaceutical, medical devices and diagnostics markets, reported that it's spending with MBEs in 2004 increased by 45% to over $250 million. The corporation's spending with minority-owned and woman-owned businesses combined increased by 33% in 2004. The 2004 numbers were the result of several key initiatives to institutionalize supplier diversity at Johnson & Johnson. These included: enlisting a vice-president level "Supplier Diversity Champion" at each of the companies in the Johnson & Johnson companies, the formation of cross-functional teams at each of the companies, and the inclusion of supplier diversity targets on the operating company business plans.
Operating company associates staffed the Johnson & Johnson booth at almost thirty events across the country last year, and held two internal outreach events in the past sixteen months. In addition, the corporation awarded three scholarships to diverse businesses for executive education programs, included diverse suppliers in its internal procurement education program, and held its second annual Supplier Diversity Awards event in June.
Support for supplier diversity is strong at the top of the corporation. William C. Weldon, CEO of Johnson & Johnson said, "Our supplier diversity program broadens our commitment to the communities in which we live and work. Having a diverse supplier base strengthens our ability to conduct business across all cultures and geographies and, in doing so, gives us access to the thoughts, ideas, and perspectives of some of the most diverse and forward-thinking companies in industry."
For more information, visit www.jnj.com, and click on "Suppliers".
Supplier Diversity is a long-standing and fundamental commitment for the Altria family of companies, which includes Altria Corporate Services, Kraft Foods and Philip Norris USA.
Our focus on Supplier Diversity began in the 1970s, and in 1981 we established our Supplier Diversity Development Process as a priority initiative. Since 1999, the Altria family of companies has purchased over $1 billion dollars annually from minority and women-owned businesses.
In recent years, our process has evolved to include programs not only for our first tier or direct suppliers but also for second tier suppliers. In December 2004, we were proud to host a summit for first and second tier suppliers to network and explore business opportunities with the Altria family of companies. We believe investments like these help not only our suppliers' businesses, but ours as well.
Potential opportunities to partner with our family of companies are extensive. We have an outstanding reputation for top-quality consumer products that requires supplier commitment to high-quality standards for everything we purchase.
We actively encourage participation by minority and women owned companies as key providers or as secondary providers of materials and services. This policy is a reflection of our commitment to equal opportunity and our desire to return value to society. Our highest levels of management communicate and drive this commitment across our companies.
Connie Smith, team leader of the Altria Supplier Diversity Development Task Force, explains it this way: "In any business, it is important to have a choice of quality suppliers. In our business, we believe that working with a diverse range of suppliers provides us a competitive edge in producing high-quality products. We welcome new ideas, energy and the spirit of entrepreneurship to reach our goals, and we often find this energy in minority and women-owned business partners."
If you would like to learn more about becoming part of the Altria family of companies' supply chain, visit www.altria.com/mwbe.
The supplier diversity program at American Airlines was established in ]989. Its mission is to afford qualified minority, women-owned and small businesses the opportunity to participate as potential suppliers of products and services to American Airlines. The program is administered from the Corporate Purchasing Department and is represented throughout the corporation by supplier diversity advocates. The advocates are responsible for representing supplier diversity within their respective departments on a day-to-day basis. Annually, each department establishes goals for its supplier diversity spend. Progress against those goals is measured to ensure that each department is on track to realize their supplier diversity objective.
Diverse businesses have proven to be competitive in providing a wide range of resources that support American's operations. Since the establishment of the Diversified Supplier Program in 1989, total expenditures with diverse suppliers exceed $2 billion.
Supplier diversity at American Airlines focuses on providing visibility and opportunity to minority, women-owned and small businesses. Success is dependant on the supplier's ability to be price competitive in the marketplace, provide a quality product and/or service and deliver that product or service in a timely manner. American Airlines attempts to match potential suppliers with their customer within the American Airlines organization to establish a line of communication between the supplier and the customer. This match is accomplished subsequent to supplier registration on our new diversity web site, which was introduced in 2003.
American participates in numerous events that provide opportunities to meet minority business owners such as the Black Enterprise Conference. A listing of the events where AA representatives will be present is featured on the web site as well as a bid calendar, which will allow perspective suppliers to plan accordingly. If you are a diversified supplier and would like to explore opportunities with us, please visit our web site at www.aa.com/supllierdiversity. Or contact Luis Gomez, Manager of AMR and American Diversified Supplier Program, at 817-963-2620, or email@example.com.
GlaxoSmithKline (GSK), one of the world's leading research-based pharmaceutical and health care companies, is committed to improving lives by helping people do more, feel better and live longer.
As part of GSK's company commitment and through its Supplier Diversity program, GSK strives to improve the lives of people and the communities in which it serves. GSK is committed to supplier diversity and ensures a percentage of discretionary dollars are spent with diverse businesses ... like yours.
At GSK, Supplier Diversity is a business imperative. Not only is the company committed to procure goods and services from small diverse suppliers but also to assist these suppliers develop the necessary capabilities to sustain growth. Here at GSK we have implemented a diverse supplier development plan to assist in the achievement of this goal.
Diversity strengthens us, not just in the research lab but in the marketplace as well. Therefore, our commitment must go beyond the diversification of employment and expand to create opportunities for diverse suppliers. The fact is, as our customer base becomes more diverse, we need to ensure our supplier base is diverse by supporting the purchases of goods and services from a diverse population.
GSK's supplier diversity motto "Together ... Everybody Wins!" summarizes the team's commitment to economic prosperity for diverse small businesses and for GSK. For the small business, the economy and for GlaxoSmithKline, Supplier Diversity is a classic win-win for everyone.
For more information on how to partner with our company and a list of products and services we buy, Visit us at http://ussupplierdiversity.gsk.com.
The Home Depot is committed to promoting economic growth through diversity by offering competitively priced, high quality products and services to our customers: providing healthy competition within our supplier base; and ultimately, increasing shareholder value. This commitment to growth will be achieved through a comprehensive Supplier Diversity business strategy including minority-owned, women-owned, and small businesses.
As The Home Depot continues its unprecedented growth and remains the leader in the home improvement industry, this business imperative is essential to exceeding the expectations of our customers, our partners, and our shareholders.
We are committed to creating effective competition utilizing all possible sources. We will actively seek targeted diverse businesses and provide them the opportunity to partner with the Home Depot to provide competitively priced, high quality goods and services to our customers.
Finally, we advertise in publications that are geared toward diverse business owners. We believe these vehicles, in conjunction with our Web site, www.homedepot.com/supplierdiversity, will assist us in effectively identifying prospective suppliers. The website will enable potential suppliers the ability to interact with our buyers in the following ways:
* Establish and maintain a comprehensive company profile for review by our buyers responsible for specific products and services
* Receive a confirmation of registration within 3 days
* Use the system to communicate with the Supplier Diversity Team and our Buyers
* Use the system to stay informed about upcoming RFP/eAuction sourcing opportunities
In return, the Home Depot Buyer will:
* Use the system to review potential suppliers as they apply to the Home Depot and provide a response within 60 days
* Use the system to communicate with, and request additional information from potential suppliers
* Use the supplier database to search for qualified suppliers
"Working with The Home Depot Supplier Diversity learn was a very rewarding and mutually beneficial experience. The process was well defined, communicated time frames were upheld, and the flow of information was seamless...."
Reuben McDaniel, CEO
Jackson Securities, LLP
THE COCA-COLA COMPANY
With a supplier diversity presence for more than 20 years, The Coca-Cola Company made a public commitment in 2000 to spend $800 million with minority- and women-owned businesses over a five year period. Under the leadership of Johnnie Booker, Director of Supplier Diversity, progressive annual targets were established for each of the five years and we have exceeded these targets each year. During 2004, $232 million was spent with diverse suppliers against a target of $190 million. This brings our cumulative total to $745 million, exceeding the 4 year target by 24 percent. In 2005, the fifth and final year of this commitment, all indications are that we will substantially exceed the $800 million goal.
The Coca-Cola Company's commitment to supplier diversity will not end in 2005. The commitment to continually build supplier diversity as a long-term business strategy comes from the very top of the Company. E. Neville Isdell, Chairman and CEO, expressed his personal commitment to the success of supplier diversity at the Company's fourth annual "Partners in the Promise Awards Celebration" held on April 7, 2005.
Each year this event celebrates the Company's success and pays tribute to employees and companies who have demonstrated an outstanding commitment to supplier diversity. Mr. Isdell stated, "As a consumer product company, our success depends on our ability to listen and respond to consumers and customers, and to respond rapidly to changes in the marketplace. If The Coca-Cola Company is going to continue to be a leader in the marketplace, we must also be a leader in supplier diversity. Tonight I am honored to share with you my personal commitment to this imperative." He also shared his plans to present The Chairman's Supplier Diversity Award at this event next year, which will include a check for $10,000 to the individual or group who demonstrates the most exceptional commitment to supplier diversity.
The Coca-Cola Company is proud of its success in supplier diversity, and we are determined to continue our momentum with an unwavering commitment for years to come. This commitment is also embedded in the Coca-Cola Promise, "... to benefit and refresh everyone who is touched by our business."
SUPPLIER DIVERSITY: DOING WELL BY DOING GOOD
Each day Cargill does business around the world in food, nutrition, agriculture, and supply chain management. Our work in diverse communities has made us very aware of the importance of diversity in our supply chain. At Cargill, we've learned that no one has a monopoly on good ideas and that they can come from anyone, anywhere. It is for this very reason that Cargill embraces and celebrates diversity, both internally and externally.
Cargill makes a point of including suppliers from many backgrounds-ncluding small businesses and businesses owned, controlled, and operated by minorities and women. As a result, the company is making continuing progress to satisfy its diverse customer base, their customers' customer, enrich communities, and enhance profitable growth.
Supplier diversity is critical to meeting government small business/diversity goals-but it happens also to be a winning business strategy. "We find that diverse companies, even though they typically are smaller, are more attentive to our needs," says Tim Thomas, director of supplier diversity for Minneapolis-based Cargill. "They are often more amenable to assisting us with R&D projects and on-time delivery solutions, and they address procurement niche areas that larger corporations aren't always willing or able to fulfill."
Better supplier service means better support for Cargill's customers. "Supplier diversity becomes a distinctive value and a competitive advantage for us," he adds. "We think it's a win/win situation for everyone--Cargill, our diverse suppliers, our customers, and the communities that we and our customers live and work in--by providing jobs that bring money back into the community. There is no reason why companies shouldn't embrace supplier diversity. It's just a matter of doing good business!"
Charles Barnes, one of the founders of Memphis Chemical and Janitorial Supply Company, represents one of the many success stories associated with the FedEx Diverse Supplier Development program. "We found a better way to make 'blue juice,'" he says, describing the fluid used in aircraft lavatories. "We were able to show FedEx how we could save them money." The "blue juice" contract is one of several the company has with FedEx.
Memphis Chemical, which began in 2000 with four employees, has now grown to 12 employees, due in large part to the contract negotiated with FedEx. He says being affiliated with a company with the stature of FedEx has opened up other business opportunities as well. "We have moved to another level of business excellence, due in part to meeting FedEx's rigorous standards of price and service," he says.
Begun in 1992, the FedEx Diverse Supplier Development program now includes more than 5,000 active suppliers. Since 2001, well over $1.3 billion has been spent with these women and/or minority-owned businesses.
"We like to think of our diverse supplier efforts as a philosophy, rather than just a program," says Mary McDaniel, vice president of Materiel & Corporate Sourcing, FedEx Express. "We provide a dedicated staff to help diverse suppliers compete fairly with all suppliers for FedEx business."
FedEx actively seeks out potential suppliers through its participation with trade shows, conventions and programs sponsored by groups such as Black Enterprise, the National Minority Supplier Development Council, the U. S. Hispanic Chamber of Commerce and the U.S. Pan Asian American Chamber of Commerce.
McDaniel says successful suppliers are those who can provide quality products and services, delivered on time and at competitive prices. "Prospective suppliers need to answer the following questions--'Do I have a product or service that FedEx needs?' and 'Do I have the resources to supply these needs in sufficient quantities as well as the support service required?'"
FedEx is committed to having as diverse a supplier base as possible. According to McDaniel "It's part of our corporate culture."
For more information about how to get involved in the FedEx Diverse Supplier Development program, please visit http://www.fedex.com/us/supplier/ diverse/.
MAJOR LEAGUE BASEBALL
Major League Baseball continues to "Step Up To the Plate!"
Major League Baseball's reputation as a leader in diversity dates back to 1947, when Jackie Robinson broke the Major League Baseball color barrier. Demonstrating their continued commitment to diversity both on and off the field, Major League Baseball has stepped up their game with their Diverse Business Partners program.
In 1998, Commissioner Allan H. Selig authorized the establishment of the Diverse Business Partners program, MLB's initiative designed to increase opportunities for minorities and women to participate within the procurement activities of Major League Baseball. Since its inception, MLB has spent millions of dollars with thousands of minority and women-owned businesses, making it the premier supplier diversity program in sports.
"Our Diverse Business Partners Program was designed to maximize opportunities for MLB's franchises and the communities they serve. We know equal opportunity business is good for our business," says Wendy Lewis. Wendy is Major League Baseball's Vice President of Strategic Planning for Recruitment and Diversity and oversees the league's Diverse Business Partners Program.
In 2005, MLB will host its 76th ALL-Star Game in Detroit in conjunction with its Detroit Tigers' franchise. This year will also be the year that MLB introduces David Robinson, son of the legendary Jackie Robinson, into its supply chain with David's Sweet Unity Farms branded premium coffee. Both scenarios are exciting opportunities for Major League Baseball to further engage the minority and women business marketplace and communities.
For more information about the Diverse Business Partners program, visit MLB's official website (www.mlb.com) or call 800-975-DBPP (3277).
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|Author:||Klimley, April W.|
|Date:||Jun 1, 2005|
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