top companies for supplier diversity
TRANSCRIPT
WWW.Blackenterprise.cOM • photograph by LoNNIE C. MaJor • aprIL 201558
By The Editors
Here are the leaders in procurement spend and partnerships with minority firms. Find out how your company can benefit.
SUPPLIER DIVERSITYTOP COMPANIES For
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karMetria BurtOn, general Manager Of supply chain ManageMent strategic programs for Delta air lines inc., maintains that the company does more than identify diverse suppliers. it builds collaborative partnerships. says Burton: “Working together, we are able to achieve mutual success.”
Delta, which has spent as much as $500 million with minority suppliers in 2014, chooses suppliers based on criteria that include understanding of its business objectives, solid financial standing, core competency in the potential supplier’s line of business, cer-tification, and “value-added” capabilities. Gaining consideration, Burtons says, “depends on the area in which the supplier does business but they first have to be certified. They have to have scale and scope, need to be innovative in their thinking and provide solutions to us. They are also required to be customer-focused.”
Those selected become beneficiaries of Delta’s long-term commitment to help its suppliers grow. “We encourage our Tier 1 suppliers to foster relationships with Tier 2 minority suppliers for subcontracting opportunities because that’s how they get to grow their business and learn how to do business with Delta,” she says. “We provide teaching assistance, coaching, mentoring, and advise Tier 2 companies on how to become Tier 1.”
Frequently contracted products and services include ground support equipment, aircraft and engine parts, food, marketing, safety and security, and technology. Delta has partnerships with a number of outstanding black-owned businesses that include SodexoMagic, a food services company co-owned by entrepre-neurial superstar Magic Johnson, which provides bartending and labor in Delta’s premium Sky Clubs, and UpTime Electric, an Atlanta-based firm that handles electrical contracting services for Delta’s buildings and airport facilities.
UpTime has been involved in a range of infrastructure projects including passenger boarding bridges, boarding wait rooms, and IT, voice and data support systems. UpTime’s Chairman and CFO Lauretta “Randi” Clowers says Delta is “a driving force” for the company’s growth since it became UpTime’s leading customer in 1977. “Delta is recognized worldwide in its field. And we get recognition with the association of Delta Air Lines as one of our major contracts,” she says. “It opens doors.”
For those reasons, Delta has been included on our list of the “35 Top Companies for Supplier Diversity”—a roster of major companies most committed to diversifying vendor pools.
black enterprise’s editorial research team contacted corporate purchasing departments, supplier diversity officials, and procure-ment experts to review and evaluate such programs among the nation’s top 1,000 publicly traded companies. Our selections met the following criteria:
n Companies that had the largest minority procurement spend, especially with African American firms. Those listed confirmed actual dollars allocated to products and services with minority vendors—figures ranging from $150 million to $1 billion-plus.
n Publicly traded companies that can be found on the Bil-lion Dollar Roundtable, corporations that spend $1 billion or more each year with certified, Tier 1 minority-owned vendors.
n Firms that contract with certified minority businesses and annually increase their collective and individual spend with such vendors.
n Supplier diversity programs that have instituted substantial financing, outreach, orientation, mentorship, and management development initiatives to bolster vendors, enabling them to scale up and placing them on track to become prime suppliers.
Our list, however, does not indicate that all major companies fully embrace supplier diversity. We found hundreds that don’t have such programs or refused to respond to our research process. And an overwhelming number of companies that allocate billions to contract products and services spend less than 1% of those dol-lars with African American firms. (see sidebar)
Companies must understand the true value of diverse suppli-ers. Reggie Williams, CEO of Procurement Resources Inc., and one of the nation’s leading experts on supplier diversity, who counts Delta among his clients, says that companies that truly embrace supplier diversity don’t view it as a matter of corporate goodwill but a business imperative. Beyond gaining quality goods and services, these companies receive innovative alternatives that can create new products and services, strengthen processes, and enhance the customer experience and access.
You’ll find such companies on our roster.
Allstate Corp.Since 2003, Allstate has steadily increased
the procurement of goods and services with diverse suppliers. In 2013, it spent $409.1 million with these diverse businesses.
www.allstate.com/procurement/ supplier-diversity.aspx
AT&T Inc.AT&T mentors diverse suppliers to be solution
experts for the core areas of its business as well as nontraditional and emerging lines.
www.att.com/gen/corporate-citizenship?pid=17724
Avis Budget Group Inc.Avis’s mission intends to assure that
disadvantaged, minority- and women-owned business enterprises will have the
maximum practicable opportunity to participate in contract awards.
www.avisbudgetgroup.com/company-information/diversity-and-inclusion/
supplier-diversity/supplier-diversity-policy
Bank of America Corp.Two major areas of focus include diverse
supplier development and diverse supplier inclusion in procurement opportunities.
about.bankofamerica.com/en-us/our-story/supplier-diversity.html#fbid=h9JUTYHbQ7F
BE's 40 Best Companies for DiversityBillion Dollar Rountable National Minority Supplier Development CouncilKEY
fOr the past fOur DecaDes, telecOMMunicatiOns
giant AT&T has powered its supply chain with a diverse pool of
vendors by, among other actions, including minority entrepre-
neurs in the competitive bidding process. In 2014, AT&T spent
$16.5 billion with minority business enterprises, focused on
setting one of the industry’s most aggressive supplier diversity
goals: 21.5% of total spending with certified diverse businesses.
The breakdown: 15% targeted to MBEs, 5%
for women-owned business enterprises, and
1.5% for service-disabled veteran business
enterprises. “We believe minority, women,
and service-disabled veteran-owned sup-
pliers bring value to our company through
their unique skills and innovative ideas,” says
Alithia Bruinton, AT&T supplier diversity
director. Their efforts help us deliver world-
class products and services to meet our
customers’ diverse needs and by improving
our position in the communications industry
as an innovative leader.”
Big Green Group in Chester, New Jersey,
which delivers products and services solu-
tions in the telecommunications sector,
has taken full advantage of AT&T’s supplier
diversity program and reaped rewards. Big
Green Group began its relationship with the
telecom as a Tier 2 supplier for one of AT&T’s
prime vendors conducting broadband
installation support. The firm now serves
AT&T directly, distributing antenna systems
installations in the northeast.
The range of Tier 1 and Tier 2 diverse
suppliers at AT&T is rapidly and steadily
growing. “We have firms in professional and technical services,
technology integration, facilities management, media, and
broadband deployment services. Many of them appear on
the be 100s.” The goal at AT&T is simple: to connect certified
diverse business with opportunities to provide products and
services to AT&T around the world. Bruinton professes, “It’s
just the way to do business.” —safondra floyd
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AT&T: Connecting Diverse Suppliers to Global Opportunities
We believe minority sup-pliers bring value through
their unique skills and innovative ideas."
The Boeing Co.In CY 2013, Boeing awarded more than $5 billion to first tier small, disadvantaged,
women-, and veteran-owned businesses.
www.boeingsuppliers.com/esd/index.htm
The Coca-Cola Co. In 2000, The Coca-Cola Co. pledged to spend
$800 million with MWBEs over a five-year period. By 2005, it exceeded that goal with a spend of more than $1 billion with MWBEs.
www.coca-colacompany.com/our-company/suppliers/supplier-diversity
Comcast Corp.Comcast aims to provide equal access
and opportunity to all suppliers. Between year-end 2010 and year-end 2013,
Comcast NBCUniversal spent more than $3 billion with diverse vendors.
corporate.comcast.com/our-values/diversity-inclusion/supplier-diversity#accordion-0
Darden Restaurants Inc.The supplier diversity initiative is the major
driver behind Darden’s efforts to bring about diversity awareness and oppor-
tunities within its supplier network.
www.darden.com/diversity/supplier.asp
Delta Air Lines Inc.Delta identifies and builds relationships with high quality small, minority-, and women-owned business enterprises and encourage
its 1st tier suppliers to do the same.
www.delta.com/content/www/en_US/about-delta/partnering-with-delta/supplier-diversity.
html
Exelon Corp.Since 2005, Exelon and its subsidiaries
have facilitated close to a half-billion dol-lars in corporate spending from certified
diverse suppliers on an annual basis.
www.exeloncorp.com/suppliers/supplierdiversity/overview.aspx
Fiat Chrysler Automobiles NVSince 1983, the primary focus of Fiat Chrysler's Diversity Supplier Development department
is to maintain a qualified diverse supply base that is reflective of its customer base.
app.suppliergateway.com/chrysler/Login.aspx
Ford Motor Co.For Ford, having a broad and diverse supplier base reinforces the company's commitment to the communities where it lives and works.
www.fordsdd.com/sdd_program/whoweare.htm
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Freddie MacFreddie Mac provides outreach by
publishing contract opportunities and meeting with diverse supplier trade
associations and organizations.
www.freddiemac.com/corporate/diversity/supplier_diversity_policy.html
General Motors Co.The GM Supplier Diversity team identifies
new minority and/or women business enterprises and communicates information
to the SD Leads within each function.
www.gmsupplierdiversity.com/about-us.jsp
Honda North AmericaWorking alongside minority supplier
development councils and the Small Busi-ness Administration, Honda’s workshops
educate potential ethnic minority and women suppliers on its business operations.
csr.honda.com/diversity/diversity-at-honda/diversity-at-honda-suppliers
IBM Corp.IBM believes a diverse supplier base is integral
to company profitability and strategic objectives, increasing the opportunity to hear new ideas,
apply different approaches, and gain access to additional solutions that
respond to customer needs.
www-03.ibm.com/procurement/proweb.nsf/ContentDocsByTitle/United+States~Supplier+diversity
Johnson & JohnsonSince 1998, Johnson & Johnson’s total spend-ing with small businesses and diverse-owned
suppliers has been nearly $1 billion.
www.jnj.com/partners/suppliers/supplier-diversity
Johnson Controls Inc.Johnson Controls currently has more than 600 diverse suppliers representing more than 50
product and service categories, and more than $1.88 billion in purchases from diverse firms.
www.johnsoncontrols.com/content/us/en/about/our_diversity/supplier_diversity.html
JPMorgan Chase & Co.JPMorgan Chase hosts customized in-house
and virtual Matchmakers/Trade Shows, information sessions on procurement strategies, and networking receptions
with buyers and prime suppliers.
www.jpmorganchase.com/corporate/About-JPMC/ab-supplier-diversity.htm
The Kroger Co.The goal of Kroger’s Supplier Diversity
Program is to foster the promotion, growth, and development of minority, women, and other diverse owned enterprises.
www.thekrogerco.com/vendors-suppliers/supplier-diversity
Lockheed Martin Corp.Lockheed Martin partners one-on-one with
select suppliers to share best practices, benchmark, and provide recommendations to build their Ethics & Business Conduct program.
www.lockheedmartin.com/us/suppliers.html
Marriott International Inc.With women-owned businesses mak-ing up 10% of its supply chain, Marriott has spent nearly $4 billion with diverse
suppliers over the last decade.
www.marriott.com/diversity/supplier-evaluation.mi
Merck & Co. Inc.In addition to setting specific targets, Merck engages suppliers through pro-
grams including sustainability planning, mentoring, scholarships, and other external educational opportunities .
www.merck.com/about/how-we-operate/diversity/supplier-diversity.html
Microsoft Corp.In Fiscal Year 2014, Microsoft spent more than $2 billion working with suppliers that are minority-, disabled-, veteran-,
and woman-owned businesses.
www.microsoft.com/about/companyinforma-tion/procurement/diversity/en/us/default.aspx
Bank Of aMerica Believes an investMent in MinOrity
business pays big dividends. The increase in its Supplier Diversity
and Development Program procurement spend each year made
BoA the first financial services company to join the exclusive
Billion Dollar Roundtable—corporations that spend $1 billion or
more each year with Tier 1 women- and minority-owned suppli-
ers. “Through our 25-year commitment to doing business with
diverse suppliers and investing in their development, we illustrate
not only our understanding of the importance of having a supplier
base that reflects our employees and customers, we illustrate our
commitment to strengthening the communities we serve, and we
continue to spur economic growth,” says Vonshe Jenkins, senior
vice president of supplier diversity and development.
BoA’s supplier diversity program has two main objectives:
expand the number of suppliers and boost the dollar amount
spent with them. The company also focuses on supporting sup-
pliers’ development so they can do more business with BoA and
other corporations. BoA’s Enterprise Services Executive and Sup-
plier Diversity Development Executive Tiffany Eubanks-Saunders
(pictured) says: “Our supplier diversity program ensures that we
focus attention on the revenue-generation and capacity-building
for African American suppliers in the communities we serve.”
Its Small Business Institute aims to assist entrepreneurs in
building capacity in four main areas: business strategy, tech-
nology, marketing, and finance. —lisa fraser
BANK OF AMERICA: Developing A Supplier Base That Reflects Employees and Customers
Through investing in
supplier development, we strengthen the
communities we serve and spur economic growth."
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Pacific Gas & Electric Co.In 2014, PG&E achieved more than $2 billion in diverse spending, or 41% total spend, repre-
senting the sixth consecutive year it surpassed the cumulative percentage established by the California Public Utilities Commission for procurement from diverse vendors.
www.pge.com/en/b2b/purchasing/supplierdiversity/index.page
PepsiCo Inc.PepsiCo views supplier diversity as a busi-
ness advantage because it supports building economic wealth with diverse businesses and
the development of minority communities.
www.pepsico.com/Purpose/Talent-Sustainability/
Diversity-and-Inclusion
Procter & Gamble Co.P&G's ongoing investment in supplier
diversity includes spending exceeding $2 billion with minority- and women-owned
suppliers over the last few years.
www.pg.com/en_US/partners_sup-pliers/index.shtml
Sempra EnergySempra Energy works with a range of suppliers and sets yearly procurement goals for women-, minority, and service-disabled, veteran-owned businesses, and supports non-DBE businesses that subcontract work to participating DBEs.
www.sempra.com/about/supplier-diversity/our-commitment.shtml
Sprint Corp.Sprint's supplier diversity program included
more than 600 businesses owned by minori-ties, women, and disabled veterans.
www.sprint.com/companyinfo/scm/supplier diversity/index.html?ECID=
vanity:supplierdiversity
State FarmState Farm tracks Tier 1 and Tier 2 spend
with certified diverse suppliers to increase opportunities with MBEs and WBEs.
https://b2b.statefarm.com/b2b/sup plier_diversity/index.shtml
Toyota Motor North AmericaOne of the key aspects of Toyota’s supplier
diversity commitment is to foster long-term, sustainable relationships with certified MBEs and WBEs in local communities.
temasupplierdiversity.com/about-us
Verizon Communications Inc.In 2014 Verizon Treasury worked with 13 minority-, women-, and veteran-owned
businesses on 10 financial transac-tions worth about $38 billion.
www.verizon.com/about/our-company/supplier-diversity
Walmart Stores Inc. In FY15, Walmart spent approximately $13.5
billion with women and minority-owned busi-nesses, including $10.4 billion in direct-spending
and $3.1 billion in second-tier spending.
corporate.walmart.com/suppliers/supplier-diversity/
Wells Fargo & Co.Wells Fargo's mission is to build relation-ships within the communities it serves through the development, inclusion, and utilization of certified MWDSBEs.
www.wellsfargo.com/about/diversity/supplierdiversity/overview
Xerox Corp.Xerox’s supplier diversity objective is to ensure the inclusion of diverse suppliers as a part of its
strategic sourcing and procurement process.
www.xerox.com/about-xerox/citizen ship/supplier-diversity/enus.html
in 2014, JOhnsOn cOntrOls’ purchasing With MinOrity
suppliers exceeded $1.7 billion. In fact, the company gained
products and services from 54 Tier 1 black suppliers, represent-
ing more than $731 million in procurement spend. “By incor-
porating certified women- and-minority-owned suppliers, as
well as small or disadvantaged businesses, into our customer
solutions, we economically equip entire communities and we
gain a competitive advantage,” says Reginald K. Layton, vice
president of diversity business development.
One supplier that has been a prime beneficiary of its supplier
diversity efforts has been automotive interior systems manufac-
turer Bridgewater Interiors L.L.C. (No. 3 on the be industrial/service companies list with $1.5 billion in revenues). A member of
the Billion Dollar Roundtable, Johnson Controls is an equity joint
venture partner with Bridgewater, which assembles, sequences,
and delivers seating systems, overhead systems and consoles to
customers such as General Motors, Ford, Chrysler, and Honda.
(CEO Ronald Hall Sr. and VP Ronald Hall Jr., pictured.)
To help MWBE suppliers transition from Tier 2 to Tier 1 sup-
pliers, Johnson Controls offers an in-depth mentorship pro-
gram with four components: Minority Executive Development,
Multi-Corporation Capacity Building, Supplier Performance
Recognition, and Targeted Growth/Strategic Development
Opportunities. —lisa fraser
JOhNSON CONTROlS: Mentoring Companies to Reach Tier 1 Status
By incorporating minority supli-
ers into customer solutions, we gain a
competitive advantage.”
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When it comes to providing professional ser-
vices to major corporations, African American
asset managers have been locked out. That
conclusion came from a comprehensive report
recently delivered at the Rainbow PUSH Wall
Street Project Economic Summit. During the
main-stage session, “Money Where it Matters:
Managing corporate, endowment & foundation
funds,” it was revealed that hundreds of corpo-
rations, foundations, and universities continue
to exclude African American money managers
from handling billions in pension funds and
endowment dollars. According to the Wall Street
Project Asset Management Study, minority firms
have been unable to gain a foothold in a sector
in which assets under management totaled a
whopping $68.7 trillion and profits grew to
$93 billion in 2013. As part of her summit
presentation, Sabrina Philson, a principal
of Epsilon Advisors L.L.C. and author of
the report, shared the following findings:
n although MWbE investment managers
have made strides in managing public sector
pension plans—largely due to legislative tar-
gets for hiring such firms—the ultra-lucrative
private pension arena remains elusive.
n the sector is “highly concentrated”
with the leading five mutual fund compa-
nies managing 49% of all domestic mutual
fund assets and top 25 companies manag-
ing 74%. In fact, nine U.s.-registered firms
have more than $1 trillion in global assets
under management.
n decision makers have not made inclusion
a priority and diversity champions are virtually
non-existent when it comes to advocacy for
greater african american representation in the
space. one of the main factors: the absence of
african american C-suite executives and board
members at the nation’s largest corporations
and foundations.
n Investment consultants used to conduct
money management searches don’t recommend
african american firms and, in most cases, have
not received marching orders from corporate
clients to identify a diverse slate of candidates.
Using data from the be asset managers list,
the study further revealed that the 15 black firms
manage a total of $118.4 billion in assets—a mere
0.3% of the total $36 trillion in domestic institu-
tional assets under management. For instance,
BLACK ASSET MANAGERS NEED
NOT APPLY?
77 of the 100 largest publicly-traded companies
do not contract with be 100s money managers.
Of the 23 companies that hired be 100s money managers, five had the “broadest board
diversity”—Bank of America, PG&E, PepsiCo,
Walt Disney, and Exelon, whose SVP and Chief
Investment Officer Douglas J. Brown told sum-
mit attendees that an African American invest-
ment firm was its top performer. Exelon, Bank of
America, PepsiCo, and PG&E can all be found on
this Top Companies for Supplier Diversity roster.
Among the barriers to entry, Philson says, is
“the perception that these firms were novices
in the field despite the fact that their founders
and employees received their training and honed
their skills at bulge-bracket firms.” Moreover, she
found that be 100s firms demonstrated
consistently superior performance.
John Rogers Jr., CEO of Ariel Investments
(No. 3 on the be asset managers list with
$9 billion in assets under management)
and a member of the summit panel, says
corporations and universities will continue
to exclude African American money manag-
ers from such high-margin activity because
too many believe black suppliers are only
capable of providing “construction, cater-
ing, and janitorial services … basically the
same jobs we had during slavery— building,
cleaning, and making meals.”
What will reverse this trend? Rogers, a
co-founder of the Black Corporate Directors
Conference, says one answer is populating
boards with the “right” corporate directors—
African Americans willing to challenge CEOs
and senior management to develop inclusive
supplier practices and searches.
Others like Ralph Moore, CEO of consulting
firm RGMA, and Orim Graves, executive direc-
tor of the National Association of Securities
Professionals, maintain that minority executives
can play a role. Black managers, they say, can
create access by pushing for inclusion of Afri-
can American-managed mutual funds on their
employers’ slate of 40l(k) and 403(b) offerings.
“Companies that buy banquet tables [at black
events] don’t do business with us,” Rainbow PUSH
President Rev. Jesse Jackson said during the ses-
sion. Continuous, unyielding advocacy, he main-
tains, will force recalcitrant CEOs to offer more
than lip service to inclusion. —Derek t. Dingle be
The 15 largest
black asset management firms man-
aged just 0.3% of domestic
institutional assets under
management.