W E B I N A R :

THE EVOLUTION OF

DIVERSITY IN

PROCUREMENT

Julie Holmes, Sr. CBM

Julie.holmes@grainger.com

757-934-1023

AGENDA

1. Market Conditions

2. The Grainger Tier 1 Distributor Alliance (DA) Solution

3. The Grainger Tier 2 Supplier Diversity Solution

4. Questions

MARKET

• Higher Education

• Commercial — Manufacturing

• National Accounts

• Federal Government

• Government/Defense Contractors

• State/Local Government

MARKET

• $8.5B market in 2022

• Growing 3.6% over 5 years

• Increasing mandates – particularly with

prime contracting opportunities

• Offer provides Grainger a competitive

advantage in the MRO space

TRENDS

• Efficiency

• Saves time

• Reduce/prevent downtime

• Just-in-time inventory

• Control expenses

• Meet goals & performance objectives

• Profit margins

• Increases top-line revenue

• Manage cost control/cost containment

TRENDS

• Contract realization & diversity goals

o Internal policies/procedures

o External rules/regulations

o Reporting

• Maintaining safety regulations

• Maintaining certifications

(CONT)

MARKET POTENTIAL

State Diversity/Small Business Goal

New York 30% MWBE

6% SDVOSB

Virginia 42% SWaM

Ohio 15% MBE

5% EDGE

Texas 21% TX HUBzone

California 25% SB and 3% DVOSB

EDGE (Encouraging Diversity, Growth & Equity; SWaM (Small Woman and

Minority; SDVOSB (Service Disabled Veteran-Owned Business)

POLL #1

If your organization has a diversity spending

target, what is the % of spend goal?

A. 0-5%

B. 5-10%

C. 10-15%

D. 15-20%

E. Over 20%

T I E R 1 : DISTRIBUTOR ALLIANCE (DA) POSIT IONING

WHAT IT IS

Tier 1 Distributor Alliance

(DA) is a network of DBE

resellers authorized to

resale Grainger® MRO

products.

MISSION

Provide Grainger® customers

with an offer to meet their

socio-economic goals or

mandates through the use of

certified diverse authorized

resellers.

*Disadvantage Business Enterprise (DBE) are companies 51% controlled by a socially

and economically disadvantage individual and may include woman, minority, or veteran

Confidential owned certifications.

DA EXPECTATIONS

• Customer-facing

• Responsible for specific end-customer service

activities

• Sales activity

• eCommerce

• Technical product expertise and quoting, order

processing and invoicing/direct billing

• Adhere to contract compliance with customer

PASS

THROUGH

PROGRAM

RELATIONSHIP DYNAMICS

ORDER

INVOICE

Sales Growth

Relationship Management

Value Added Services

ORDER

INVOICE

CUSTOMER

SOLUTION BENEFITS

Customer

• Provides an offer that allows customers to meet their

DBE goals

• Saves time/money by consolidating spend

• Benefits from Grainger’s reliable supply chain

• Access to more than 1.5 million products and value-

added services

Grainger®

• Differentiates Grainger and gives competitive

advantage

• Drives incremental sales

• Extends and compliments coverage/reach

• Promotes social responsibility

DBE Partner

• Provides access to more than 1.5 million products

• Enhances the DBE coverage/reach

• Provides a reliable supply chain

• Supports local tax base and provides jobs in the

community

Mutual benefit

&

value add

Seller

• Expands coverage through partnership

• Access to new opportunities & contacts

IS DA THE RIGHT SOLUTION?

• Do you have mandates or a social responsibility goals

for diversity spend?

• How is compliance driven throughout the organization

to use DBEs?

• Is this a one-time bid?

• What certifications or services are required (e.g., vet, minority,

woman-owned, etc.)?

• What capabilities and/or value-added service must a diverse business have

(e.g., installation, kitting, etc.) to support the opportunity?

• Is the geography (city/state) of the DA partner important?

• What e-commerce connectivity is required

for the DA partner?

TYPES OF DA PARTNERS

• Electrical providers

• Office supply distributor

• Janitorial service providers & contractors

• Hardware stores

All resellers in the Distributor Alliance offering go through a vetting process to ensure

scale, diversity and compliance. Grainger® prefers DBEs with strong ownership and

some criteria to include:

• Tenure

• Annual revenues

• Geography

• Back-office support

• Sales force

• Appropriate 3rd party certifications

T E I R 2 : SUPPLIER DIVERSITY

WHAT IT IS

A Tier 2 institution has a

requirement where they need to

buy a product manufactured by a

small or diverse business. They

buy this product from Grainger®

who gets the product from a

small or diverse business. These

products are designated on

www.grainger.com.

MISSION

Supports the growth of

historically underrepresented

businesses and work with

nearly 170 women-, minority-,

veteran-, service-disabled

veteran- and LGBT-owned

businesses in the U.S. that

provide more than 32,000

products to our company’s

offering.

SUPPLIER DIVERSITY PROGRAM

The Supplier Diversity Program provides access to

ESB/MBE/WBE/DV manufacturers and suppliers

through our catalogs and distribution channels.

Products provided by ESB/MBE/WBE/DV

manufacturers and suppliers are identified as part of

the supplier diversity program with the following

symbol.

The Supplier Diversity Program encompasses our

public and commercial sector customers and offers

32,000 products.

POLL #2

For which tier are your diversity spend goals?

A. Tier I

B. Tier II

C. Both Tier I and Tier II

HOW IT WORKS

Through our robust ERP and SAP systems, Grainger® can track ESB/MBE/WBE/DV

purchases of product and services and provide reporting addressing ordering, delivery,

and invoicing to members. Reporting can also provide insight to purchases from

Distributor Alliance members.

The list of ESB/MBE/WBE/DV products may be viewed at the following link:

https://www.grainger.com/content/supplier-diversity-customer-information.

OUR SUPPLIERS

Procurement processes can be slow and complex, with unclear

ownership, too many approvals needed to order, and multiple systems.

• Existing procurement solutions are made up of multiple tools

and standards that are difficult to understand, much less audit

and manage.

• Systems are rarely integrated and require handoffs and

duplication each step of the way.

• Custom tools must work with off-the-shelf solutions.

POLL #3

How do you locate diverse suppliers?

A. Certification agencies

B. Third-party providers

C. Google search

D. Through other diverse suppliers

E. Other

SUCCESS STORY

Lois Rouder

Sr. Channel Business Manager

Austin, Texas

lois.rouder@grainger.com

512-751-0672

EVOLUTION

• Evolved from taking orders to providing solutions which allows us all to be successful

• Evolved from working “together” to creating true partnerships

• Involve partners in Grainger® training programs

o Importance of speaking the same message

o Importance of expanding our capabilities

o Importance of expanding our customer touches

TEXAS OPPORTUNITY LANDSCAPE

Texas small business goal - 21.1% with billions in annual spend

• Over 180 agencies — over 1,200 school districts with over

5m students

• 2nd largest state behind Alaska in area and behind California

in population

• Over 675,000 road miles —TxDOT spends over $3B per year

and only 8% with small business

SUCCESS STORY

• 7 DA partners

• Certifications span all areas — HUB, women-owned, Hispanic women-owned, Asian-owned, African

American & service-disabled veterans

• Coverage

o Multiple partners covering the state, hiring sales and customer service personnel and finding new

contacts to help grow the business

• Services allow us to better serve our customers

o Trailers

o Embroidery

o Kitting

o Branding of pens, hardhats, safety supplies, etc.

o eCommerce — to better manage orders from requisition to check

SUCCESS STORY

• Mentoring opportunities for all partners

o Business planning — create targets and monitor progress

o Sales Meetings — train and coach DA sales team members & DA members attend Grainger®

team meetings to educate our internal team members on new capabilities

o Quarterly Business Reviews for customers conducted by Grainger and DA partner

o DA partner knows your business and can find independent ways to add value

• Small business revenue grew by 10% in 2017 in Texas with a huge upside in front of us

(CONT)

Q&A

Questions?

Please submit your questions now into the question panel on your toolbar.

For more information on our Distributor Alliance program, visit grainger.com/distributoralliance.

For more information on our Supplier Diversity program, visit grainger.com/supplierdiversity.

Want to stay ahead of the curve on more topics like this?

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