top companies for supplier diversity

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WWW.BLACKENTERPRISE.COM PHOTOGRAPH BY LONNIE C. MAJOR APRIL 2015 58 By The Editors Here are the leaders in procurement spend and partnerships with minority firms. Find out how your company can benefit. SUPPLIER DIVERSITY TOP COMPANIES For SPECIAL REPORT

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Page 1: TOP COMPANIES For SUPPLIER DIVERSITY

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

special repOrt

Page 2: TOP COMPANIES For SUPPLIER DIVERSITY

aprIL 2015 • @BLACKENTERPRISE 59

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

Page 3: TOP COMPANIES For SUPPLIER DIVERSITY

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

WWW.Blackenterprise.cOM • aprIL 201560

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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Page 4: TOP COMPANIES For SUPPLIER DIVERSITY

WWW.Blackenterprise.cOM • photograph by MIChaEL LobLoNdo • aprIL 201562

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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Page 5: TOP COMPANIES For SUPPLIER DIVERSITY

WWW.Blackenterprise.cOM • photograph by LoNNIE C. MaJor • aprIL 201564

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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aprIL 2015 • photographs by Margot JordaN • WWW.Blackenterprise.cOM 65

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.