“Supplier Connection is a platform to open the door for a supplier to begin a relationship with a large enterprise,” says Patrice Knight, vice president of global procurement, IBM Integrated Supply Chain. “It gives them information that can accelerate them from the matchmaking to the business making.” In 2011, IBM spent more than $3.1 billion worldwide with diverse suppliers, $2.6 billion of which was first tier, that is, it was spent directly with the suppliers.
Clear, unambiguous communication helps, too. “Our success stems from providing clear expectations to our suppliers,” says Marion Gross, vice president, Field and Supply Chain Services, U.S. Supply Chain Management, McDonald’s USA. “We encourage new suppliers to learn as much as possible about McDonald’s business, to network with other McDonald’s suppliers, and to bring us a compelling value proposition. We also ask them to clearly articulate their expertise, their company’s capabilities, competitive advantage in the marketplace, and track record of customer satisfaction. It’s better if their business already has a broad customer base and is not solely dependent on McDonald’s.”
Making supplier diversity a part of corporate policy, developing education and mentorship programs, and ensuring that diverse spending is accurately tracked so that the effectiveness of diversity efforts can be evaluated have all been helpful. Less than half of respondents to Sen. Menendez’s survey provided racial supplier data; some said they did not track this data. Thus, a key recommendation was for corporate buyers to track supplier diversity in terms of ethnicity/race. Wright, the president of NMSDC, says its corporate guidelines include establishing a comprehensive minority supplier development process with an active mentoring and training program for MBEs, as well as capacity-building measures to help minority firms engage in joint ventures and strategic partnerships. Such efforts help prepare MBEs to compete for larger contracts.
“Our diverse suppliers need to build capacity and scale so they can take advantage of those major contracts,” says Patterson. That means making sure adequate financing is in place to grow.
Supplier diversity best practices are being applied globally as well. “Major corporations are beginning to expand supplier diversity programs overseas,” says Patterson. NMSDC initiated international matchmaking opportunities for minority-owned companies about a decade ago. To expand, minority firms must broaden their reach across borders to become part of the global supply chain.
View the 2012 Best Companies for Diversity here.
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