Notwithstanding, why do most corporations continue to underperform when it comes to supplier diversity? Many are still climbing their way up a learning curve. “They have to understand why it’s being done,” says Sharon Patterson, Billion Dollar Roundtable’s president and CEO. “Once they understand the business case for supplier diversity, they generally get on the bandwagon and try to increase it. There are the best practices they have to understand, too, that will help them increase their procurement spend. They are learning. As they advance on that learning curve, they’ll do better.” Furthermore, consolidation continues to be an issue. Large corporations have long been reducing the number of suppliers they contract with, but their spending has started to increase since the Great Recession. “When the economy took a downturn in 2008, many minority businesses adapted their products and services to other industries, introduced new products, and implemented other strategies to keep their businesses healthy,” says Joset Wright, president of NMSDC.
Still, securing their business isn’t easy. “Suppliers have to embrace all the hard work it takes to get in the door,” says Patterson. “They have to bring value to the proposition. Value means more than just having a product that meets quality standards.”
Best Practices in Effect
Our top 40 companies on this year’s roster are recognized as having solid track records in total procurement dollars spent among diverse suppliers and the strong practices mentoring a diverse supply chain network. Early last year, IBM spearheaded a website called Supplier Connection as an efficient way to help small suppliers do business with large corporations (including IBM) that include fellow list members AT&T, Bank of America, Citigroup, JPMorgan Chase, Kellogg, and Wells Fargo, as well as AMD, Amylin, Caterpillar, Dell, Facebook, John Deere, Office Depot, Pfizer, and UPS. Supplier Connection, a common portal in the cloud likened to the undergraduate Common Application, enables suppliers to access $300 billion combined in procurement spend from these corporations. There is no charge to register your small business on the site.
View the 2012 Best Companies for Diversity here.
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