Supply Chain Supply Chain Diversity ProgramsDiversity Programs

Gonzalo MasiasGonzalo MasiasMichael ChengMichael Cheng

Scott OlsonScott OlsonKim LepinKim Lepin

OverviewOverview

What are Supply Chain Diversity What are Supply Chain Diversity Programs?Programs?

Components of a Supply Chain Components of a Supply Chain Diversity ProgramDiversity Program

DriversDrivers ChallengesChallenges How to achieve diversity goals within How to achieve diversity goals within

the context of overall goalsthe context of overall goals

Supply Chain Diversity Supply Chain Diversity ProgramsPrograms

When an organization includes the When an organization includes the underrepresented groups who can underrepresented groups who can provide goods or services to the provide goods or services to the organization. These groups include organization. These groups include minority, women, and disabled minority, women, and disabled veteran-owned business enterprises veteran-owned business enterprises (MWDVBE) or historically underutilized (MWDVBE) or historically underutilized businesses (HUB). businesses (HUB).

To qualify as a HUB the company needs To qualify as a HUB the company needs to be 51% owned by such individuals.to be 51% owned by such individuals.

ComponentsComponents

Apple ExampleApple Example– OutreachOutreach– CertificationCertification– QualificationQualification– DevelopmentDevelopment– UtilizationUtilization

DriversDrivers

Government Government – SupportSupport– Example (Missouri and Connecticut)Example (Missouri and Connecticut)

Good business senseGood business sense– Increases market shareIncreases market share– Customer expectationsCustomer expectations

BenefitsBenefits

BenefitsBenefits

ECONOMICAL ECONOMICAL – Better access to specialized skills and Better access to specialized skills and

attractiveness to customers with range attractiveness to customers with range of backgroundsof backgrounds

– Cost reduction opportunities. Smaller Cost reduction opportunities. Smaller companies have smaller overhead costs companies have smaller overhead costs

– More involvement and commitmentMore involvement and commitment

BenefitsBenefits

SOCIALSOCIAL– Ability to help Minority groups improve Ability to help Minority groups improve

living standards, as well as education living standards, as well as education and facilitate business developmentand facilitate business development

– Minority suppliers create jobs in urban Minority suppliers create jobs in urban areasareas

– Important to have a supply chain that Important to have a supply chain that looks like the company’s employee base looks like the company’s employee base and potential marketsand potential markets

BenefitsBenefits

FLEXIBILITYFLEXIBILITY– Smaller = More agile and flexible. More Smaller = More agile and flexible. More

creative.creative.– FedEx example. Supplier moving closer FedEx example. Supplier moving closer

to its customer.to its customer.

BenefitsBenefits

BUILDING RELATIONSHIPS BUILDING RELATIONSHIPS – Suppliers’ workers likely to develop Suppliers’ workers likely to develop

affinity for their customers products.affinity for their customers products.– IBM know-how passed to their suppliers.IBM know-how passed to their suppliers.

ChallengesChallenges

Top management/Company buy-inTop management/Company buy-in– Contracts, Time, CostsContracts, Time, Costs

Implementing diversity programs and Implementing diversity programs and training training

– IBMIBM Developing Relationships Developing Relationships

– Cost of mentoring smaller suppliers Cost of mentoring smaller suppliers Quality Assurance RiskQuality Assurance Risk

– Finding a company that fitsFinding a company that fits Lack of suppliers for certain commodities Lack of suppliers for certain commodities

Achieving Diversity Goals Achieving Diversity Goals Within Overall Supply Chain Within Overall Supply Chain

GoalsGoals Lucent ExampleLucent Example

– Supply Chain GoalsSupply Chain Goals Increase Quality Increase Quality Reduce cycle timesReduce cycle times Lower CostsLower Costs

– Diversity Supply Chain GoalsDiversity Supply Chain Goals Increase spending with diverse suppliersIncrease spending with diverse suppliers Utilizing the skills of a diverse range of Utilizing the skills of a diverse range of

peoplepeople

Achieving Diversity Goals Achieving Diversity Goals Within Overall Supply Chain Within Overall Supply Chain

GoalsGoals How Lucent ties them togetherHow Lucent ties them together

– Benefit from their diverse suppliers experience, Benefit from their diverse suppliers experience, location, and technologylocation, and technology

– Improve their ability to meet the changing Improve their ability to meet the changing market demands, while achieving significant market demands, while achieving significant economieseconomies

– Diverse cultures create new markets with a Diverse cultures create new markets with a demand for new products and servicesdemand for new products and services

– Suppliers are certified and meet their standards, Suppliers are certified and meet their standards, Lucent is able to provide their customers with Lucent is able to provide their customers with high-quality, cost-efficient products and services high-quality, cost-efficient products and services on a timely basison a timely basis

Achieving Diversity Goals Achieving Diversity Goals Within Overall Supply Chain Within Overall Supply Chain

GoalsGoals QualificationsQualifications

– Be certified as a MWDVBE by a third partyBe certified as a MWDVBE by a third party 51% owned, proof of US citizenship, and effective 51% owned, proof of US citizenship, and effective

management of businessmanagement of business National Minority Supplier Diversity Council NMDSC – National Minority Supplier Diversity Council NMDSC –

www.nmsdc.orgwww.nmsdc.org Women’s Business Enterprise Council WBENC – Women’s Business Enterprise Council WBENC –

www.wbenc.orgwww.wbenc.org Association for Service Disabled Veterans ASDV – Association for Service Disabled Veterans ASDV –

www.asdv.orgwww.asdv.org– Preferably be ISO certified or at least ISO compliantPreferably be ISO certified or at least ISO compliant– Be EDI CapableBe EDI Capable– Be able to demonstrate financial viabilityBe able to demonstrate financial viability– Exercise internal MWDVBE initiativesExercise internal MWDVBE initiatives– Present a diverse workforcePresent a diverse workforce

SummarySummary

As managers this is important As managers this is important because of the benefits that it can because of the benefits that it can bring to your business. With support bring to your business. With support from upper management and the from upper management and the proper supplier diversity program in proper supplier diversity program in place it will be easier to accomplish place it will be easier to accomplish your overall supply chain goals. your overall supply chain goals.

Class exerciseClass exercise

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