engage magazine issue 001 spring \'06 - Page 20

20 BUSINESS CASE Diversity Incorporation Supplier Diversity in the USA Unlike the UK, supplier diversity in the USA is well established, albeit through affirmative action policies. USA diverse suppliers are generally defined as companies owned by people of colour and women, although other groups, such as veterans with disabilities, are sometimes included. Monitoring is seen as very important as it is a measurable way of demonstrating a commitment to diversity and, from a business perspective, of making a significant, positive impact on emerging-market communities. Many companies talk about making a commitment to diverse suppliers, but the real measure of that commitment is in the numbers, particularly the percentage of the procurement budget allotted to diverse suppliers. DiversityInc, is a US based company that benchmarks on diversity. It has extensive data on more than 300 companies. Each year, DiversityInc invites US businesses to compete for a place across several diversity strands. The companies benchmarking range from technology companies to a major auto manufacturer to consumer-products companies, but they all have one thing in common: a long-term and deep commitment to increasing procurement spending with diverse suppliers. The DiversityInc 2006 Top 10 Companies for Supplier Diversity together with an example of why each company made the list is given below: No. 1 Sempra Energy The California energy company spends 21 percent of its procurement budget with Tier I (contractor) diverse suppliers, 16.5 percent with minorityowned vendors. No. 2 Consolidated Edison Co. of New York Con Ed spends 16.5 percent of its procurement budget with Tier I (contractor) diverse suppliers, 13.75 percent with minority - owned suppliers. No. 3 JPMorgan Chase The financial services giant is one of the only companies nationwide to have a gay/lesbian supplier program. Only 12 percent of the Top 50 have such a program. No. 4 Comerica With 21 percent of its procurement budget going to Tier I (contractor) diverse suppliers, the Detroit-based bank also has 10 percent of its procurement budget with Tier II (subcontractor) diverse suppliers. No. 5 AT&T Formerly SBC, a national supplier-diversity leader, the telecom has 788 diverse suppliers and offers them loans, education and training support. No. 6 BellSouth The telecom tracks mandatory Tier II (subcontractor) diversity in a computer database and offers loans and training to diverse suppliers. No. 7 Herman Miller With mandatory third-party certification of vendors, this first - time participant in the Top 50 survey also makes supplier diversity part of the procurement department. No. 8 Bank of America With 9,558 minority - and women - owned suppliers, Bank of America clearly communicates supplier-diversity goals, metrics and successes. No. 9 Hewlett-Packard The California tech company spends 24 percent of its procurement budget with diverse suppliers, 18.25 percent with minority - owned businesses. No. 10 TXU With mandatory third - party certification of vendors, the Texas energy company also offers training to diverse suppliers. The DiversityInc Top 10 Companies for Supplier Diversity earned their spots based on many factors. Their commitment to the communities they serve is demonstrated by their support for their suppliers in the form of education and financial assistance. Although all maintain a healthy financial commitment to minority- and women - owned vendors, several other fact ors propelled them to the top of this list, especially: percentage of procurement budget spent with Tier I and Tier II (subcontractor) diverse suppliers; third - party certification of minority - and women-owned firms; not defining supplier diversity as including all small businesses; not excluding any business categories from supplier diversity; tracking supplier diversity in a database and linking management compensation to supplier - diversity results. Source: www.DiversityInc.com engage SPRING ISSUE 2006