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Supplier Diversity
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Minority
business development gets a jump-start.
By William Poe
More than a hundred companies here are working to increase their
purchases from minority business suppliers as part of a new program
to spur development of new businesses and fuel regional growth.
“If we do not develop our minority business population, our area
is not going to be as strong as it could be, and we lose some of
our best and brightest in the process,” says Harold W. Gast, senior
minority business developer for Ameren Corp.
“Minority firms contribute both to job growth and to the overall
economic health of St. Louis,” says Andrew Taylor, president and
CEO of Enterprise Rent-A-Car.
But Taylor and other executives also see distinct company bottom-line
advantages for increasing supplier diversity. As Taylor says, companies
benefit “by realizing cost savings, by gaining a larger pool of
qualified suppliers and by receiving higher quality products or
services due to increased competition.”
There’s no doubt that a whole lot of St. Louis area companies are
working to support local minority business enterprises, or MBEs,
by expanding the diversity of their suppliers and vendors.
Currently 114 area companies are members of the Purchasing Officers’
Network, which formed two years ago to spearhead increases in corporate
purchases from MBEs. The network, in turn, is part of the St. Louis
Business Diversity Initiative, a collaborative business-initiated
effort to help businesses develop a more racially diverse workforce
and supplier base. It is all part of a comprehensive effort to make
St. Louis a nationally-recognized, minority-friendly region. (For
the initiative’s business-related purposes, a minority is a racial
or ethnic minority. Minority businesses are defined as firms or
companies that are at least 51 percent owned, managed or controlled
by racial or ethnic minorities.)
Karen Burkart, manager of MBE development for Clayton-based Graybar
Electric Co., became earlier this year an executive on loan to the
Initiative. At Graybar, she not only buys from MBEs; she’s encouraging
others to do so as well. “I would like to see some major action
items and put some real teeth in this initiative.”
Progress has been tangible already.
Graybar, an electrical and telecommunications equipment distributor,
bought $275 million in products and services in 2000 from minority
businesses across the country, Burkart says. Graybar will likely
double that number when 2001 figures are tabulated, she adds.
Just four years ago, Graybar challenged itself to make 10 percent
of its purchases from minority business enterprises, including firms
headed by women, or WBEs. “Nationwide, we’re very close to that
now,” Burkart says.
Marriott International, Inc., which operates lodging facilities
under a number of brands including Marriott, Courtyard, Fairfield
Inn, and Ramada, spent $151 million in 2001 with minority- and women-owned
businesses, according to Michael Tobolski, senior director of diversity
initiatives for Marriott. That represents 5.1 percent of all purchases,
he adds.
In St. Louis, goals are more aggressive. For the new $270 million,
1,081-room Renaissance St. Louis Hotel being constructed on Washington
Avenue, Marriott, which was selected as hotel operator, is trying
to achieve 25 percent participation by MBEs and 5 percent by WBEs,
says Tobolski. “For goods and services after opening, our intention
is to mirror the goals used by the city of St. Louis.”
Ameren Corp., the parent company of Ameren UE, has a corporate policy
for the “Expanded Utilization of Small Minority Business Enterprises”
and has implemented procedures to maximize opportunities for MBEs,
WBEs, and other so-called disadvantaged businesses, according to
Gast. “We have the commitment of managers that they are to make
purchases from minority- and women-owned businesses,” Gast says.
Although Gast gave no figures, he says Ameren’s commitment to purchase
from St. Louis minority businesses is “an ongoing effort. We buy
a whole range of things, and we’re interested in doing business
not only with minority-owned businesses but also small disadvantaged
businesses.”
At Enterprise, Gene Roth of the company’s purchasing department
says, “We’ve had great luck here in St. Louis. Enterprise spends
millions of dollars each year with minority-owned, women-owned and
disadvantaged businesses in the St. Louis metropolitan area.”
Roth and Ramona Dickens, vice president of supplier diversity at
Bank of America, co-chair the Purchasing Officers’ Network.
Graybar, Marriott, Ameren, and Enterprise have all developed and
continue to hone supplier diversity programs that best fit their
businesses.
At AmerenUE, Gast says the company has structured programs that
reflect the company’s core business of electrical power generation
and natural gas distribution. “We have a program to develop direct
and indirect construction and maintenance contracts. We feel these
contracts provide us the best opportunity to work with local certified
minority businesses, and we have a construction minority business
development specialist on board.”
Graybar is a products distributor and does not buy a lot of other
products and services beyond its stocking needs, Burkart says. So,
she says Graybar has focused on “teaming agreements with minority
companies that have a product line or a service that we don’t carry
and can bring value to our customers.”
For example, Graybar has partnered with two minority companies to
form a third entity, called Innov8 Solutions, to supply needed engineering
and installation services for the company’s telecommunications customers.
In St. Louis, Graybar is exploring teaming with TAB Co., a local
office and industrial products supplier and with the Newberry Group,
a computer software development firm, Burkart says.
This spring, Enterprise will host an open door forum where local
minority businesses can learn about opportunities to do business
with the rental car giant. “It’s a 360-degree process,” Roth says.
“MBEs and potential minority suppliers all sit down with our people.
Each MBE is invited to bring a guest or two, and we discuss concrete
opportunities and ways to improve our current program. We’re focusing
on spending more money in St. Louis with MBEs.”
Marriott has taken steps to ensure that minorities and women are
represented in the company’s core franchise portfolio. In Dec. 2001,
Marriott had 138 hotels that were either operated or under development
by ethnic minority and women franchisees, Tobolski says. To make
sure it happens, the company has provided $214 million in loans
and other financial assistance, he adds.
Everyone says more needs to be done.
“We need to take some St. Louis MBEs and make them national,” Burkart
says.
Gast adds, “For some things, I must get a call every other day from
minority businesses. In other areas, it has been much more difficult
to find minority companies, and we may need to develop some minority
businesses in certain areas.”
Minority business owners can read about supplier opportunities in
St. Louis by visiting the initiative’s web site at www.stlbizdiversity.com.
The site provides links to dozens of potential corporate customers.
William V. Poe is principal of Poe Communications, a St. Louis
advertising and marketing communications firm. |
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