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Supply Chain Diversity Programs. Gonzalo Masias Michael Cheng Scott Olson Kim Lepin. Overview. What are Supply Chain Diversity Programs? Components of a Supply Chain Diversity Program Drivers Challenges How to achieve diversity goals within the context of overall goals.

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supply chain diversity programs

Supply Chain Diversity Programs

Gonzalo Masias

Michael Cheng

Scott Olson

Kim Lepin

overview
Overview
  • What are Supply Chain Diversity Programs?
  • Components of a Supply Chain Diversity Program
  • Drivers
  • Challenges
  • How to achieve diversity goals within the context of overall goals
supply chain diversity programs1
Supply Chain Diversity Programs
  • When an organization includes the underrepresented groups who can provide goods or services to the organization. These groups include minority, women, and disabled veteran-owned business enterprises (MWDVBE) or historically underutilized businesses (HUB).
  • To qualify as a HUB the company needs to be 51% owned by such individuals.
components
Components
  • Apple Example
    • Outreach
    • Certification
    • Qualification
    • Development
    • Utilization
drivers
Drivers
  • Government
    • Support
    • Example (Missouri and Connecticut)
  • Good business sense
    • Increases market share
    • Customer expectations
  • Benefits
benefits
Benefits
  • ECONOMICAL
    • Better access to specialized skills and attractiveness to customers with range of backgrounds
    • Cost reduction opportunities. Smaller companies have smaller overhead costs
    • More involvement and commitment
benefits1
Benefits
  • SOCIAL
    • Ability to help Minority groups improve living standards, as well as education and facilitate business development
    • Minority suppliers create jobs in urban areas
    • Important to have a supply chain that looks like the company’s employee base and potential markets
benefits2
Benefits
  • FLEXIBILITY
    • Smaller = More agile and flexible. More creative.
    • FedEx example. Supplier moving closer to its customer.
benefits3
Benefits
  • BUILDING RELATIONSHIPS
    • Suppliers’ workers likely to develop affinity for their customers products.
    • IBM know-how passed to their suppliers.
challenges
Challenges
  • Top management/Company buy-in
    • Contracts, Time, Costs
  • Implementing diversity programs and training
    • IBM
  • Developing Relationships
    • Cost of mentoring smaller suppliers
  • Quality Assurance Risk
    • Finding a company that fits
  • Lack of suppliers for certain commodities
achieving diversity goals within overall supply chain goals
Achieving Diversity Goals Within Overall Supply Chain Goals
  • Lucent Example
    • Supply Chain Goals
      • Increase Quality
      • Reduce cycle times
      • Lower Costs
    • Diversity Supply Chain Goals
      • Increase spending with diverse suppliers
      • Utilizing the skills of a diverse range of people
achieving diversity goals within overall supply chain goals1
Achieving Diversity Goals Within Overall Supply Chain Goals
  • How Lucent ties them together
    • Benefit from their diverse suppliers experience, location, and technology
    • Improve their ability to meet the changing market demands, while achieving significant economies
    • Diverse cultures create new markets with a demand for new products and services
    • Suppliers are certified and meet their standards, Lucent is able to provide their customers with high-quality, cost-efficient products and services on a timely basis
achieving diversity goals within overall supply chain goals2
Achieving Diversity Goals Within Overall Supply Chain Goals
  • Qualifications
    • Be certified as a MWDVBE by a third party
      • 51% owned, proof of US citizenship, and effective management of business
      • National Minority Supplier Diversity Council NMDSC – www.nmsdc.org
      • Women’s Business Enterprise Council WBENC – www.wbenc.org
      • Association for Service Disabled Veterans ASDV – www.asdv.org
    • Preferably be ISO certified or at least ISO compliant
    • Be EDI Capable
    • Be able to demonstrate financial viability
    • Exercise internal MWDVBE initiatives
    • Present a diverse workforce
summary
Summary
  • As managers this is important because of the benefits that it can bring to your business. With support from upper management and the proper supplier diversity program in place it will be easier to accomplish your overall supply chain goals.
  • Class exercise
sources
Sources
  • www.apple.com/supplierdiversity/
  • www.scportal.lucent.com/DMS/index.jsp
  • www.scportal.lucent.com/DMS/diversity/www/qualification.htm
  • www.scportal.lucent.com/DMS/diversity/www/supplier.htm
  • www.nmsds.org/who_we_are/certification.html
  • http://www.wbenc.org/certification/index.html
  • www.slmbc.org
  • www.firstgov.gov
  • http://www.eds.com/industries/aerospace/downloads/Aerosp_V2_GenericPlane_US.pdf
  • http://www.diversityinbusiness.com/dib2002/dib20202/ExecInsight_RMoore.htm
  • http://www.eei.org/magazine/editorial_content/nonav_stories/2006-05-01-DIVERSITY.pdf
  • http://www.ibm.com/ibm/responsibility/pdfs/ibm_crr_supply_053105.pdf
  • http://www.primerevenue.com/what/pdfs/MWBE.pdf
  • http://www.das.state.ct.us/Purchase/SetAside/SAP_Search_Vendors.asp
  • http://www.oa.mo.gov/oswd/faq.htm#targets
  • http://www.ni.com/company/procurement/supplierdiversity.htm
  • http://procure.rutgers.edu/supplierglossary.html
  • Paige, L. Buying into Diversity, Materials Management in Health Care, August 2005.
  • Armstrong, Julie. "Ford Motor tries to gauge minority supplier spending." Automotive News 79.6113 (2004): 8-8. Business Source Premier. 29 May 2006. http://search.epnet.com.
  • Huber, Sig. "Supplier relations are the key to Toyota's North American success." Purchasing 134.13 (2006): 58-58. Business Source Premier. 29 May 2006. http://search.epnet.com.
  • Burke, Erin. "A passion for diversity." Materials Management in Health Care 14.8 (2005): 2-2. Business Source Premier. 29 May 2006. http://search.epnet.com.
  • Carbone, James. "IBM says diverse suppliers are good for business." Purchasing 134.13 (2006): 27-28. Business Source Premier. 29 May 2006. http://search.epnet.com.
  • Avery, Susan. "Only the best suppliers will do." Purchasing 134.13 (2006): 56-57. Business Source Premier. 29 May 2006. http://search.epnet.com.
  • Vijayan, Jaikumar. "Diversity in IT Supply Chain Pays Off, CIOs Say. (Cover story)." Computerworld 38.11 (2004): 1-16. Business Source Premier. 29 May 2006. http://search.epnet.com.