Supplier diversity

Corporate America wants to spend money with minority- and women-owned suppliers — lots of money.

In fact, last year, national corporations spent $100 billion with minority business enterprises (MBEs) through supplier diversity programs, said Stacey Key, president of the Georgia Minority Supplier Development Council

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Georgia Women's Business Council

Roz Lewis, executive director of the Georgia Women’s Business Council, says that certification is the first step to qualify as a diverse supplier.

(GMSDC). As an affiliate of the National Minority Supplier Development Council, the organization’s goal is to certify MBEs, help develop minority businesses and connect MBEs with opportunities in the corporate world.

Those opportunities are available in all fields. Corporations are looking for minority suppliers for “anything you can imagine, from IT and consulting to transportation and logistics; to staffing, packaging, marketing and consulting — any product or service they need,” Key said.

Columbus-based Aflac Inc., for instance, spent more than $30 million through its supplier diversity program last year, largely in the areas of IT, facilities support and maintenance, documentation management and staffing, said Bill Haley, Aflac’s vendor diversity coordinator.

The first step in qualifying as a diverse supplier is to get certified as a minority- or woman-owned enterprise. Certification is available through several organizations, including the GMSDC for ethnic minorities, the Georgia Women’s Business Council (GWBC) for women-owned firms, and governmental agencies, including cities, counties and the Small Business Administration.

Certification verifies a company is what it claims — that it is owned by a woman or a member of a minority group. The GWBC, for example, examines legal and financial documentation to make sure that the applying company is at least 51 percent owned and controlled by a woman or a group of women.

“The certification process can be daunting, because of all the business and legal documents required, such as business license, bylaws, history of the business and financials, including tax returns and signed contracts,” said Roz Lewis, executive director of the GWBC.

Some agencies offer precertification seminars to walk new applicants through the process. Details and applications for certification are available at the various organizations’ Web sites.

While certification is necessary to get into the supplier diversity game, it’s just the beginning. A supplier must also offer a product or service that meets the requirements of the customer.

“MBE suppliers must be capable of meeting the procurement challenges of a major corporation,” Haley said. “The supplier must understand the needs of our business and be able to clearly define the value that they bring to our operation.”

Certifying agencies such as the GMSDC sponsor programs to match MBEs with corporations.

Getting involved in these seminars and opportunity fairs is a great way to build relationships with corporations seeking diverse suppliers, said Adam Walker, a former professional football player who heads three certified minority-owned firms. Through his activities with the GMSDC, he has met a variety of corporate supplier diversity and purchasing executives who let him know when they hear about opportunities.

Being involved in a supplier diversity program allows minority suppliers to “build a relationship with a champion on the inside of the company they are targeting. This champion can provide visibility for their product or service,” Lewis said.

Another way for a minority firm to benefit from supplier diversity programs is as a Tier 2 supplier, working as a subcontractor for a major supplier (Tier 1 supplier).

Walker’s Homestead Settlement, for example, does some home closings directly for Bank of America but has also been a Tier 2 supplier.

“When you’re working with a giant like Bank of America, you’re not always working directly for them. We did the same things we did for [Bank of America] for some of their large vendors,” Walker said.

Forming alliances with other MBEs and joining forces to take on a project neither company can handle by itself is another way to get involved in supplier diversity programs.

Sandeep Gauba, president of Metasys Technologies Inc., has used this tactic and finds that large corporations see this as an added value because it allows them to work with fewer suppliers. More than 80 percent of MTI’s business comes from clients he met through supplier diversity programs.

For many GMSDC members, supplying to corporations with diversity programs is the bulk of their business, Key said. Others do plenty of work with other MBEs or target the government sector.

GMSDC members range in size from five employees up to 3,000; the average member has less than $1 million in annual sales.

Smart corporations see the benefits of having diverse suppliers and are willing to mentor minority- and women-owned businesses, Haley said of Aflac.

“As consumers in the marketplace become more diverse, companies will not only be required to have a multicultural work force but also have corporate initiatives in place such as supplier diversity programs that reflect the community in which they do business,” he said.