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The Top 10 Companies for Supplier Diversity
This article originally appeared on DiversityInc.com on May 01, 2006. Want to know how rare really good supplier diversity is? According to national industry estimates, companies that have supplier-diversity programs (and that's less than a quarter of Fortune 500 companies) spend an average of 2 percent of their procurement budgets with minority- and women-owned suppliers, compared with 7.5 percent for the Top 50 and 13.8 percent for the Top 10 for Supplier Diversity. 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 factors 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. Here are the DiversityInc Top 10 Companies for Supplier Diversity and an example for each of why the company made the list. 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 minority-owned vendors. 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. 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. 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. 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. |