Billion Dollar Roundtable
Characteristics that Shape Member's Supplier Diversity Initiatives
- Close integration with sourcing organization
- Partnership with Advocacy Groups
- Annual objectives coupled with quarterly reports
- Supplier information sessions
- Increasing support of Tier 1 suppliers in Tier 2 purchasing activities through focused relationship-building activities
- Expanding reach of performance metrics to increase accountability among team members
- Opportunity exchange, a valuable forum delivering business opportunities to MBEs
- Introduction of Supplier Diversity Champions throughout the organization
- The employment of a consultant in the early stages of program development
- Executive leadership support and involvement – the CEO is very supportive and vocal about the program
- The employment of a 3rd party I/T company to accurately identify our true minority spend
- Internal awareness programs
- Company wide implementation of NMSDC Supplier Diversity Best Practices
- Enhanced accountability tools/metrics
- In Tech Services, which is our largest area of spend, all Tier 1 contracts have a 25% diverse supplier utilization clause. Even small business suppliers which are generally exempt, have a 15% diverse supplier utilization clause.
- Requiring all large prime suppliers to become national members of NMSDC and WBENC to ensure the Tier 1 suppliers we do business with foster the same beliefs as we do
- Utilization of corporate policy to drive supplier diversity
- Establishment of supplier diversity within global purchasing
- Appropriate allocation of headcount and funding for operating purposes
- Accountability for achieving year over year supplier diversity objectives at all levels of the purchasing organization
- Frequent review of supplier diversity performance against objectives
- Canadian Aboriginal Minority Supplier Council member
- Minority Entrepreneur Initiative
- Senior management leadership involvement
Challenges facing the Supplier Diversity Program:
- Government adoption of multi-tier reporting process
- Increased emphasis on service disabled veterans
- Industry (automotive) conditions placing financial stress on supply chain
- identifying and/or developing M/WBEs in non traditional areas
- Identifying smaller opportunities to introduce suppliers that are not yet at capacity for larger projects
- Identification of minority suppliers in the electrical commodity
- Identification of WBEs with automotive capabilities that match potential opportunities
- Supplier consolidation related to company merger and strategic sourcing reduces supplier base
- Prime supplier reliance on contract manufacturing and other forms of outsourcing impacts second tier
- Internal Education
- Pressures to consolidate suppliers to cut costs in sluggish economy
- Buyer’s challenge to grow their direct import spend
- Large number of supplier inquiries versus our capacity to handle them adequately internally
- Customer enforcement of their second tier requirements
- Developing US suppliers quick enough to participate in our low cost country sourcing strategies
- Consolidation of the supply chain and impacts of telecom and I/T manufacturers outsourcing and off shoring
- Intense competitive pressures to continually lower costs is most challenging for smaller companies
- Expansion of Second Tier program
- Expansion of Supplier Diversity Program in the non-US Region
- Sourcing requirements and decision making authority moving outside the US
- Company rightsizing impacting resources available for supplier diversity operation
- Globalization, consolidation, and rationalization of supply chain reducing opportunities for MBEs that lack scale, are in commodities with high labor content, and have not developed an offshore presence
- No visible succession plans or exit strategies for founders of first generation MBE suppliers
- Enhancing MBE stature in the value chain
- Connecting opportunities for traditional MBEs with opportunities outside of the industry group
- Global sourcing
Key statistics for the incumbent members include:
• The Member corporations range in size from $379 Billion on the high end to $42 Billion on the low end.
On a consolidated basis, the 15 corporations represent:
• Industries range from automotive to telecommunications, aviation, information technology, consumer products, and to general merchandise retail.
• Combined Tier 1 purchases from diverse suppliers totaled $35.2 Billion, up 18.5% from $29.7B. in 2006.
• The average Tier 1 spend is 9.8%, up from 7% last year.
• The 15 member corporations generated a combined $9.7 Billion in second tier spend.
Compilation of BDR Survey Results
Of the 17 corporations, industries ranged from the automotive industry and telecommunications to information technology, consumer products, and general merchandise retail. Based on the data submitted in their annual surveys, key statistics for the 17 BDR members include:
Information is proprietary and confidential. Page 2 • The corporations ranged in size from $405 Billion on the high end to $6 Billion on the low end.
Tier 1 Spend>
• On a consolidated basis, the BDR members represent combined Tier 1
purchases from diverse suppliers of $39.8 Billion, up 13% from $35.2 Billion
• Average Tier 1 spend was $2.4 Billion
• Median Tier 1 spend was $1.7 Billion
• Average Tier 1 spend increased to 10.5%, up from 10.4% in 2008.
• Median Tier 1 spend was 8.4%.
Tier 2 Spend• Overall, the incumbent members generated $13.7B in Second Tier spend
• The average Tier 2 spend was $804 Million
• The median Tier 2 spend was $460 Million
BDR Member Spend Tier 1 Spend
2009 Review Based on 2008 Performance
($ in Billions)
Note: There were 12 BDR members in 2005 and 2006; 13 in 2007, 15 in 2008, and 17 in 2009.