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Developing a Minority Supplier Program
You have the best of intentions. You want to give minority-owned and women-owned suppliers a fair share business. But the reality is these organizations tend to be small, often without a track record, and unknown to you. How can you turn your desire to be fair into real opportunities for enterprising minority and disadvantaged suppliers?
Supplier Diversity Issues within Supply Management Departments
Supplier diversity programs originally started for compliance reasons in the late 1960s and the 1970s. Government customers required their suppliers to develop subcontracting plans for MBE and/or WBE suppliers. However, the growth of the minority population has given rise to a market-driven case for supplier diversity. In addition to the demographics, minority consumers are younger than the general population. This is significant since younger persons tend to consume more and will be customers for a longer period of time. Minorities tend to be more brand-loyal than the general population, so gaining their loyalty can lead to long-term profits. Minorities also tend to make their buying decision based on how they perceive an organization supports them. For example, The New York Times notes a 1999 study by Yankelovich Partners, a market research firm, that shows 87 percent of Blacks were more likely to buy from organizations that "give back" to their community, either through charitable contributions or business ventures.
Gene Roth is corporate purchasing manager for Enterprise Rent-A-Car based at the worldwide headquarters located in St. Louis. He has held functional positions as purchasing agent and senior purchasing agent. Mr. Roth is actively involved in various nonprofit organizations including the National Minority Supplier Development Council, the St. Louis Minority Business Council, and NAPM—St. Louis, Inc. He was recently awarded the MBE Buyer/
Coordinator of the Year Award from the St. Louis Minority Business Council for his efforts
in supplier diversity by advocating, marketing, and promoting the utilization of minority entrepreneurs.
Richard J. Hernández
Richard J. Hernández is a nationally known e-commerce consultant based in Chicago. He heads E-MBE.net, an e-commerce education company focusing on small, minority-owned businesses. Mr. Hernández writes for MBE, Chicago’s Minority Business, NAPM InfoEdge, Contract Management, and Minority Business News USA. Previously, he was vice president of education for a business-to-business e-commerce company. He also served as manager, corporate supplier diversity, for the U.S. Postal Service for five years. He served as a contract manager for a minority-owned firm. He was also a contracting officer for the U.S. Air Force.
- Behr, P. "A New Way of Looking At High-Tech Centers," The Washington Post, March 18, 1999
- Gellene, D. "Legislation Targets Contract ‘Bundling,’" The Los Angeles Times, August 2, 2000
- Winter, G. "P&G Helps Minority-Run Companies," The New York Times, October 30, 2000
- Cable’s Resource Connection, www.cablecareersnetwork.com
- Diversity Brings Success: Strengthening Economic Inclusion in the St. Louis Region — A Resource of the St. Louis Business Diversity Initiative
- From Diversity Brings Progress: A St. Louis Region Business Guide to Initiatives and Practices That Succeed in Workforce and Minority Business Development
- Guide to a Corporate Minority Business Development Program — A brochure from NMSDC
- "Milken Institute and the Minority Business Development Agency’s Minority Business Challenge," September 25, 2000, www.mbda.com
- Outsourcing and the Corporate Minority Supplier Development Program — A brochure from NMSDC
- William H. Blue, DuPont, Manager of DuPont’s Tempo Program
FOR FURTHER READING
- Additional information in this area can be obtained from the report titled "Minorities in Business" by the Small Business Administration’s Office of Advocacy
- Minority Business Development Agency, U.S. Department of Commerce, 14th St. & Constitution Ave. NW,
Room 5055, Washington, DC 20230
- Minority Business Information Center, 1040 Avenue of the Americas, 2nd Floor, New York, NY 10018, 212/730-6390
- National Association of Purchasing Management, Inc., 2055 E. Centennial Circle, Tempe, AZ 85284, 480/752-6276
- National Minority Business Council, 25 W. 45th St., Suite 1007, New York, NY 10017, 212/997-4753
- National Minority Supplier Development Council, Inc., 1040 Avenue of the Americas,
New York, NY 10018, 212/944-2430
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