While supplier diversity programs help minority businesses become successful, these programs also broadly impact society and major corporations. They are about doing business in a diverse world and building customer loyalty. Mega consumer brands are among the biggest supporters of supplier diversity programs providing multi-billion dollar commitments. Fourteen corporations are members of an elite Billion Dollar Roundtable. To qualify, they spend at least that amount annually with minority- and women-owned businesses. Procter and Gamble, Toyota, Daimler Chrysler, GM and Ford are among the members.
Growing your consumer base
Supplier diversity programs are as good for the company as they are for the suppliers because the people who own and work in these businesses are an important customer segment. As A.J. Lafly, the Chairman of the Board and President of Procter and Gamble explains, “Our very future depends on capturing and retaining the loyalty of a growing consumer market audience. [Supplier Diversity Programs] are one of the ways we achieve our goals.”
In addition to earning customer loyalty, hiring minority companies increases their employees’ buying power. Procter & Gamble makes it very clear, “If we do not increase economic strength among minority groups, we cannot grow our US business, which will have a major impact on our global business in the future.” The more American families that can afford their products, the greater their volume of sales.
To increase the impact of these programs, companies committed to supplier diversity in turn expect their non-minority owned suppliers to build diversity efforts of their own. SSOE has taken this to heart and has promoted supplier diversity through internal strategies as well as creative partnerships, C2C for example.
A creative solution…
Coast to Coast Engineering, LLC, or C2C is the recently formed joint venture between SSOE and d-Technologies, Inc., an Akron, Ohio-based design firm. C2C is a minority business enterprise (MBE) that utilizes engineering resources from India as part of its very unique business model. The two firms have collaborated on several projects for a Fortune 500 customer over the past year. They found that the partnership’s combination of d-Techs’ cost-effective resource base and SSOE’s depth of technical and project management talent provided their customer with a very competitive and high-value team. Initially C2C will focus on select customers who have a core business strategy to help historically disadvantaged businesses in the US. Ultimately, with SSOE’s international presence in China and d-Tech’s support base in India, they plan to quickly expand the venture internationally.
By contracting with C2C, SSOE’s clients are able to work with a familiar, trusted supplier and also gain the advantages of working with a minority business.
Internally, SSOE maintains our own supplier diversity database of businesses that have obtained certification from a local, state or federal agency and then submit an application to SSOE. We use the same criteria whether we are selecting a minority or woman-owned supplier, or a majority supplier. In this way supporting supplier diversity is consistent with SSOE’s passion to deliver the highest quality of service.
With its positive impact on the US businesses and the global economy, promoting diversity programs is more of a sound business decision than a helping hand. When minority businesses are held to the same performance standards as non-minority businesses, preferential treatment is a non-issue.