Supplying the global economy

How does minority supplier development fit into strategic planning process of corporations?

That was the topic of a workshop heldat the National Minority SupplierDevelopment Council Conference and Business Opportunity Fair last October in Miami. With the theme, “Building the Global Economy of Tomorrow Today,” the NMSDC held a number of workshops targeted at minority business enterprises and corporatesupplier diversity professionals.

The moderator of this strategic planningprocess workshop was Robert McCormes-Ballou, CPM, director, merchandising, Office Depot. Presenting were Pam Eason, vicepresident, worldwide procurement, Pfizer, Inc. and Paula S. Carter, manager, procurement diversity, Honda North America.

Pfizer’s personal account

The commitment to diversity andinclusion has long been an integral part of Pfizer’s overall strategy and mission, from both an internal and external perspective. Since the year 2000, according to Eason, Pfizer has been especially active in supplier diversity andworking with MBEs and WBEs, with a current annual spend of about $500 million.

“Something we’re very proud of,” Easoncontinued, “is that our [diversity] programhas continued to improve since 2000. At the end of 2005 we created an additional focus on expansion of our activities around diversity and inclusion.” This strategic approach was two-pronged, “concentrating on both colleaguesthat we hire and the suppliers we do businesswith.”

From an internal standpoint, the companyhas adapted some of their human resourcesprocesses “to make sure that we really arebecoming a more diverse and inclusive group,”Eason said.

From an external perspective, workingwith national advocacy groups is a movetowards a more progressive diversity strategy.  The company has partnered with NMSDC and the Women’s Business Enterprise National Council to offer more diversity opportunities to both MBEs and WBEs, including providing financial contributions and scholarships, participating in annual conferences, and more.

Pfizer has also extended its diversity efforts abroad.  In the United Kingdom, theyparticipated in the NMSDC program and area charter member of WBENC. In April 2007 Pfizer kicked off an initiative in Canada, where they have a strong partnership with NMSDC,focusing on “the visible minorities that arecertified.” A year later, they are seeing real progress.

“We are committed to staying on the leading edge of what’s happening [in supplier diversity],” Eason said.

Furthermore, Pfizer’s commitment to forefront diversity took them on an NMSDC-sponsored trade mission to South Africa, where company procurement leadership was ableto meet with government officials as well as black-owned businesses, giving those BEEs theopportunity to partner with key suppliers of thepharmaceutical company.

“We’re committed to NMSDC and WBENC,” Eason said. “We are strongly encouraging [suppliers] to become members ofNMSDC or WBENC.”

Honda breaks down the process

While Eason offered a glimpse into Pfizer’s supplier development strategies, Carter shared several key elements of a strategicsupplier development plan.

“First and foremost, there must be long-term upper management commitment.Otherwise, you really can’t do anything,” she said. “The upper management must agree, mustunderstand and must want to go through theprocess and make sure it’s a win, not only for their corporation, but also for the suppliers aswell,” Carter explained.

The corporation must understandthat money and/or resources may need tobe invested and that ways of measuringperformance and quality must be put in place.Minority supplier development must be part ofthe company’s business plan, Carter said.

“That is like your bible. It must be in yourbusiness plan throughout your organization. Acorporation must focus on best practices andensure that matrixes are in place,” Carter saidand added that the supplier must be involved inthe new product and process development.

She continued, “A successful strategic plan must include internal and externaltraining. [Your organization should] set targets and implement those targets and set expectations within the business process,”Carter said and expressed the importance ofsetting goals.

“There must be a consensus between the corporation and the supplier so that both partiesunderstand what needs to happen and theprocesses they need to be successful,” Cartersaid. “When gathering information, learn thesuppliers’ capabilities. What are some of your musts and wants? What is it that the supplier needs in order to be successful?”

Carter added that the plan should also include a gap analysis, “to determine wherethe supplier is and where the supplier needsto be. [Ask yourself] ‘What are the plans weneed to put in place in order to get the supplierto the point of the must meet area to meet therequirements?”‘ Carter said.

She also looked at cross-functional teams that include representatives of the variousbusiness units, various facilities, engineers andpeople from planning and administration. Sheexplained how the team approach can assistwith the implementation process.

Carter then turned attention to reportingwithin the supplier management team, anexercise she said must-be done on a quarterlyand annual basis.

“This is key. There must be supplier feedback. If the purchasing team is lookingat a supplier and there are some issues, thenthey need to get back to that supplier andexpress what those issues are so that they canbe counter-measured and worked on [so the purchaser and the supplier] can go further,” Carter said.

Carter concluded her talk, reiterating thatfocusing on minority supplier development instrategic planning can contribute to the bottomline.

“We have to work together as a team. We now realize that the consumer out there could very well be a business owner. We want to recognize that. Yes, we feel we have a very good product, but we also know that we needyou. We need each other in order to grow.”