The 2007 DiversityInc Top 10 Companies for Supplier Diversity

1. Xerox
2. Sempra Energy
3. Comerica
4. Hewlett-Packard
5. Consolidated Edison Company of New York
6. Bank of America
7. McDonald's
8. Eastman Kodak
9. KeyBank
10. DaimlerChrysler

When most companies start to "get" diversity, they focus on human capital and on areas of corporate communications, such as diversity training. Supplier diversity generally comes later, especially really effective programs that build community strength and develop long-term relationships.

The companies on this list have made major commitments to developing significant supplier-diversity programs. By doing so, they have strengthened their own ties to communities of traditionally underrepresented groups and have created stronger vendors.

Here are some key points about the 2007 Top 10 Companies for Supplier Diversity

• The Top 10 for Supplier Diversity spend 22.7 percent of their procurement budgets with Tier I minority- and women-owned suppliers (main contractors), compared with 9.7 percent for the Top 50 and 2 percent nationally
• They spend 5.5 percent of their procurement budgets with Tier II minority- and women-owned suppliers (subcontractors), compared with 2.9 percent for the Top 50
• All of the Top 10 for Supplier Diversity companies tie procurement compensation to successful supplier-diversity results, compared with 83 percent of the Top 50
• Eighty percent of the Top 10 for Supplier Diversity provide financial assistance for their diverse suppliers, compared with 57 percent for the Top 50

Methodology

In assessing the Top 10 Companies for Supplier Diversity, the most critical factors are the percent of the total procurement budget going to minority- and women-owned businesses, tying executive compensation to supplier-diversity results, having mandatory Tier II supplier diversity, community commitment (loans, education, mentoring of suppliers) and requiring third-party certification. Companies also were penalized if they included all small businesses, including those owned by white men, as "diverse suppliers" or excluded certain categories from supplier-diversity requirements.

Here are The 2007 DiversityInc Top 10 Companies for Supplier Diversity:

No. 1: Xerox

Also No. 7 on The 2007 DiversityInc Top 50 Companies for Diversity list, No. 7 for Recruitment & Retention, No. 10 for Latinos, No. 3 for Executive Women and No. 1 for GLBT Employees.

A long-time supplier-diversity leader, Xerox sends 30 percent of its procurement budget with Tier I minority- and women-owned suppliers. The company also includes  GLBT suppliers in supplier-diversity tracking, compared with 22 percent for the Top 50 and virtually no other companies nationwide. Xerox also audits its supplier-diversity numbers.

No. 2: Sempra Energy

Also No. 29 on The 2007 DiversityInc Top 50 Companies for Diversity list.

The California utility spends 19 percent of its procurement budget with Tier I minority- and women-owned suppliers, audits its supplier-diversity numbers and ties procurement compensation to successful supplier-diversity results.

No. 3: Comerica

Also No. 37 on The 2007 DiversityInc Top 50 Companies for Diversity list.

The Detroit-based bank spends 33 percent of its procurement budget with Tier I minority- and women-owned suppliers, a staggering amount. They obtain that percentage by calculating opportunity dollars, which include all of the dollars with goods/services in areas where M/WBEs have the opportunity to participate. They examine all of the businesses with delegated purchasing responsibility and look at their budgets for a year. They do take into account if there is an area where they know there is not a large pool of suppliers and they may exclude that area, but the company says very few areas are excluded. Comerica also integrates supplier-diversity initiatives into its overall corporate-business-plan goals and provides formal external training or mentoring programs for suppliers.

No. 4: Hewlett-Packard

Also No. 49 on The 2007 DiversityInc Top 50 Companies for Diversity list.

HP spends 29 percent of its procurement budget with Tier I minority- and women-owned suppliers, audits its supplier-diversity numbers and provides financial assistance for diverse suppliers.

No. 5: Consolidated Edison Company of New York

Also No. 8 on The 2007 DiversityInc Top 50 Companies for Diversity list, No. 2 for Recruitment & Retention, No. 1 for Latinos and No. 4 for Executive Women.

This company spends 14 percent of its procurement budget with Tier I minority- and women-owned suppliers and provides formal external training or mentoring programs for suppliers.

No. 6: Bank of America

Also No. 1 on The 2007 DiversityInc Top 50 Companies for Diversity list, No. 1 for Recruitment & Retention, No. 3 for Latinos, No. 8 for Asian Americans, No. 1 for Executive Women and No. 3 for GLBT Employees.

The No. 1 company on the Top 50 includes GLBT suppliers in supplier-diversity tracking, requires second-tier supplier diversity and ties procurement compensation to successful supplier-diversity results.

No. 7: McDonald's

The fast-food giant spends 54 percent of its procurement budget with Tier I minority- and women-owned suppliers and provides financial assistance for diverse suppliers.

No. 8: Eastman Kodak

Also No. 35 on The 2007 DiversityInc Top 50 Companies for Diversity list, No. 6 for GLBT Employees and No. 1 for People With Disabilities.

The long-time diversity leader spends 22 percent of its procurement budget with Tier I minority- and women-owned suppliers, includes GLBT suppliers in supplier-diversity tracking and ties procurement compensation to successful supplier-diversity goals.

No. 9: KeyBank

Also No. 31 on The 2007 DiversityInc Top 50 Companies for Diversity list.

The Cleveland-based bank company spends 11.75 percent of its procurement budget with Tier I minority- and women-owned suppliers and integrates supplier-diversity initiatives into its overall corporate-business-plan goals.

No. 10: DaimlerChrysler

Also No. 42 on The 2007 DiversityInc Top 50 Companies for Diversity list.

The auto company spends 7.5 percent of its procurement budget with Tier I minority- and women-owned suppliers, audits its supplier-diversity numbers, requires second-tier supplier diversity and provides formal external training or mentoring programs for suppliers.