MBNUSA recently had the opportunity to discuss Dell’s supplier diversity program with Cyndi Hopkins, the technology company’s director , global supplier diversity and small business liaison officer, and procurement trends with Rob Simpson, vice president of Texas Instruments Inc.’s worldwide procurement and logistics. Their answers are below .
Dell discusses its supplier diversity program
What year did your company begin its supplier diversity initiative?
Dell’s supplier diversity program began in 2002.
How long have you been with the company and how long have you run the supplier diversity program?
I have been with Dell 15 years with roles in corporate finance, product group and worldwide procurement. I became global director of supplier diversity in 2011.
Please talk about a few of your program successes.
I am proud to say we’ve had many program successes. An internal success we measure tracks the number of small businesses that outgrow their small business designation due to their business with Dell. We are proud of these accomplishments. We are also proud of our induction into the Billion Dollar Roundtable in 2008, a top-level forum for advancing the practice of supplier diversity. This honor recognizes our commitment of more than $1 billion in annual supply-chain spending with minority- and woman-owned suppliers. We continue to qualify for BDR membership annually.
What are a few key things you look for in a minority- or women-owned business as a new supplier to your company?
Dell looks for suppliers who are proactive in managing cost, supply chain, quality and time-to-market and who provide breakthrough thinking. Our goal is to identify the best suppliers that enable Dell to deliver quality solutions to our customers.
How important is certification to your supplier diversity initiative, and what are the recommended certifying organizations your company recognizes?
We rely on National Minority Supplier Development Council Inc. and Women’s Business Enterprise National Council for certification of minority- or women-owned businesses. We find that certification from these organizations is not only beneficial to us, but also provides businesses with much greater visibility — especially with U.S.-based companies — than they can attain on their own. Several Fortune 100 companies are members of WBENC and/ or NMSDC, and they are all eager to do business with WBEs and MBEs.
Certifying agencies provide resources to their members such as capacity-building programs, representation in their databases, research on best practices and educational webinars. Many companies — including Dell — offer special supply-chain financing opportunities to WBEs and MBEs. Additionally, NMSDC, WBENC and the [U.S.] Small Business Administration host matchmaking opportunities, regional events and conferences that bring WBEs and MBEs into contact with top decision makers at their potential client companies. Dell requires all minority- and women- owned businesses to be certified by NMSDC and/or WBENC. For those businesses claiming small business status, we require self-certification as governed by the Small Business Administration.
In today’s competitive climate, what are some of the industry trends and tools grabbing most of the attention in corporate supply chains?
At Dell, technology has always been about enabling potential. We are relentlessly focused on delivering technology that works harder for our customers and is more accessible to people and organizations around the world. In the near term, globalization of the supply chain is key to meet the dynamic needs of new markets and the customers we serve. Innovation in the supply base is key to enhancing the distinctiveness of our products and services.
Globalization provides opportunities for diversification of the supply chain. MBEs and WBEs must develop a global presence aligned with market growth opportunities within the industries they have targeted. Longer term, Dell’s 2020 Legacy of Good Plan brings into focus the strategies that define our commitment to put technology and expertise to work where they can do the most good for people and the planet. The plan marries our sustainability strategy to our business objectives, and we believe it will become an accelerator for successful, sustainable outcomes. We expect our suppliers not only to perform at their best, but also to adhere to our social and environmental responsibility standards.
What are some of the greatest challenges for minority- and women-owned business growth in the technology sector?
Minority/women/small businesses are growing with the corporations at a faster rate than they can develop their quality control and overall ability to scale. As a result, performance may fall below that of the larger, nondiverse supplier. A growing number of multinational corporations want to source from diverse business enterprises globally, but the reality is there are few minority/women/small businesses with the capacity to scale. Corporations must invest time and resources to assist these suppliers in developing scalable businesses that can provide competitively priced goods and services in a global market.
Tier I -to- Tier II development and collaboration has been a topic of many discussions over the past few years. Are these good strategies for minority- and women- owned business growth? Has your company had any successes working with such relationships?
Tier II programs serve as an enhancement to efforts to increase meaningful opportunities for diverse-owned enterprises to participate. Dell utilizes standard contractual language with all our suppliers to drive diverse supplier inclusion throughout our supply chain. In 2013, we launched an aggressive three-year plan to drive inclusion at the Tier II level. This year we are tracking the progress with 100 of our Tier I partners. We routinely participate in multi-tier functions to introduce our diverse suppliers to our Tier I partners. Often, consolidation of the supply base can be opportunistic for suppliers that can capitalize on the initiative. Minority- and women-owned businesses that build effective relationships with large Tier I providers have an opportunity to promote growth in the second tier.
Sustainability and innovation are two of the key buzz words in industry today . What should suppliers focus on to remain viable and relevant in the supply chain of 2014 and beyond?
Risk is essential, and it can be managed to drive growth and opportunity. The value of supply-chain visibility has increased significantly. Suppliers that establish technology- management building blocks to lay the foundation for sustainable, risk-aligned business change and innovation are well positioned. Minority, women and small businesses should have a plan for growth. Leverage converged data to improve ROI on technology infrastructure. Utilize connected devices to access information anytime, anywhere. Gain business insights and manage big data. Simplify and scale through the cloud. Leverage technology to grow the business.
Are there any current or impending industry trends or governmental discussions that will affect how minority- and women-owned businesses are integrated into corporate mainstream supply chains? Innovation— Understand governmental regulations and industry trends impacting technology, solutions, sustainability and processes and identify innovative products, components, services or solutions to enhance the distinctiveness of partner products.
Globalization— Seek to understand the entire corporate supply chain end-to-end to identify where you can be competitive. Penetrate global markets to develop a presence that is aligned with market growth opportunities. Recognize the current scale of your company, and target your market appropriately.
Strategicsourcing — Partner with large or other diverse firms to develop scale and establish a strong business reputation. Leverage established or new cross-functional relationships within your partner base to expand your business. Communicate unique processes and technology improvements you are utilizing and can provide to your partner.
TI discusses procurement trends
What are some new procurement trends for 2014?
Here are a few procurement trends I see for 2014. As in the past several years, there is continued consolidation of the supply chain. Procurement organizations want to engage and manage fewer suppliers. This reduction allows for efficiency of resources and opportunities to leverage cost savings. I expect this trend to continue.
Supply risk is a top concern for today’s chief purchasing officers and a driver of another emerging trend — the requirement for increased transparency of the supply chain. As supply chains continue to become more global in nature, supply-chain professionals must have in-depth knowledge of their suppliers at the Tier II level and beyond. The potential business impact of socio-environmental factors, such as swings in the global economy, natural disasters and threats to internet security, have risen significantly in recent years. The need to mitigate these risk factors and drive accountability for corporate social responsibility will keep this trend on the radar for 2014 and beyond.
A third trend is an increased desire by global companies to utilize suppliers with capabilities to provide goods and services beyond the U.S. The time is right for smaller suppliers to grow their business capacity through strategic alliances, partnerships, etc.
How can diverse suppliers help TI?
Diverse suppliers can help TI be successful by continuing to bring value and innovation to our supply chain. Our MWBE suppliers are among the most flexible and responsive in our supply base.
TI is a global company. And like other global companies, we have a need to utilize global suppliers as a part of our supply chain. Some of our MWBE suppliers have leveraged opportunities to do business with us outside the U.S. and have served those markets successfully for several years. The good news is, while we are a global company, we have many spaces and opportunities for local companies to do business with TI in the North Texas region. I encourage certified MWBEs to get to know our company, get to know what we buy and let us know how they can add value to TI and our customers.
What excites you most moving forward? Moving forward in 2014 I am most excited about the opportunity and the challenge of developing new supply-chain talent around the world. Much of TI’s growth in terms of our supply base, customer base and manufacturing operations is happening outside the U.S. We need a strong team of supply-chain professionals to support our growth in this global arena. I am excited about the new talent we are bringing on board. I look forward to helping them learn about TI and grow their supply-chain skills. They bring new levels of energy and creativity to the team, along with fresh ideas, that contribute to a stronger, more global supply-chain organization.