minority suppliers overcome capital needs. We now have a portfolio of $6.5 million going to 16 minority suppliers. We have to develop and support our suppliers. If their product isn’t up to par, the cars can’t be made.”
In the second and final part of our series, black enterprise will examine where these opportunities are in the private sector and give entrepreneurs the skinny on how to play the game: how to get started, where to go for help and how the process works.
While you’re approaching corporations, you’ll need to adopt a strategy that requires skill, persistence, an alternative income stream while you wait for contracts and, to a certain degree, luck. It doesn’t hurt to know someone on the inside, but if you don’t, write or call the director of minority supplier development, who usually works in the purchasing department.
Private companies aren’t bound by the same legislative rules and regulations that government agencies are. It’s up to individual companies to set their own goals and initiatives for diversifying their supplier base. Many, such as Ameritech and Kraft Foods, now tie salaries and bonuses to how closely managers meet supplier diversity goals.
“Most employees buy into this because it comes from the top down,” says Sharon Patterson, manager of supplier diversity at Kraft Foods in Northfield, Illinois, and chairman of the Philip Morris Supplier Diversity Task Force. Kraft bought $323million, or 3.8% of total purchasing dollars, from more than 240 African American suppliers in 1997.
Majority firms recognize the market value of the black community, and realize that it makes good business sense to have African Americans as suppliers as well as consumers, says Jensen. Therefore, competition is even more fierce, not to mention other factors aimed at cutting costs, such as downsizing, consolidation, outsourcing and streamlining.
Watkins Snead says most companies have a handbook or guide on how to do business with them. You should become knowledgeable about their commodities, quality standards and other pertinent details about the company. “You must also develop a relationship with the decision makers in the company who will assess your business, whether they be engineers, human resource personnel or work in the purchasing department” says Watkins Snead. “Once you’ve done that, you must find out what their needs are, areas where they need assistance, their issues with past suppliers and where they see their company going.”
Watkins suggests making on-site visits to meet with decision makers or sending them articles about their company to show them you’re knowledgeable about their firm’s activities. Outside networking through chambers of commerce and other business organizations is also key.
One method of gaining access to those in-the-know is by joining one of NMSDC’s regional purchasing councils, which has more than 3,500 members including most Fortune 500 companies. More than 15,000 minority-owned businesses have been matched with member corporations as suppliers. African American firms gain insight into procurement from their peers and corporate executives by participating in local councils that provide training on topics such as how to approach a corporation, and