Diversity Procurement Looking to Build on Outstanding Year
It’s hard to imagine a way 2016 could have been a better year for the diversity procurement program at Cummins.
In April, the company was recognized by the National Business Inclusion Consortium in its inaugural 2016 NBIC Best-of-the Best Top 30 Corporations for Inclusion.
Then in August, Cummins was inducted into the Billion Dollar Roundtable, a prestigious advocate for best practices in corporate supplier diversity. Members must have exceeded $1 billion in annual spending with diverse suppliers. There are only 22 corporations in the group, which includes Ford, P&G and Microsoft.
Finally in October, the company won its first national award from the National Minority Supplier Development Council (NMSDC) since that group’s creation in the 1970s. Cummins was named Corporation of the Year in the Top Performers category, one of 11 companies recognized for rapid growth in Minority Business Enterprise (MBE) spending at NMSDC’s annual meeting in Chicago.
“It was a tremendous honor to be included with so many outstanding companies, and the result of a lot of hard work by people across Cummins,” said Michelle Taylor, Diversity Procurement Director at the company. “But we can’t rest on our laurels. 2017 presents many challenges and we must keep moving forward.”
By working with diverse suppliers, Cummins increases competition for its business, which ultimately results in lower costs and improved service. At the same time, diversity procurement develops economic growth in all of the communities where Cummins employees live and work, consistent with the company’s Corporate Responsibility value to “serve and improve the communities in which we live.”
Despite tough market conditions, Cummins once again topped $1 billion in diverse spend in 2016, reaching $1.1 billion in spending with diverse and small business suppliers in the United States. That compares to $1.3 billion in 2015 and $1.2 billion in 2014.
The company’s diversity procurement efforts outside the United States, meanwhile, continued to grow. Diverse procurement connected to Cummins Area Business Organizations (ABOs) outside the U.S. reached $402 million in 2016, compared to $320 million in 2015. That pushed total spending with diverse suppliers both inside and outside the United States to more than $1.5 billion in 2016.
Looking ahead, Taylor sees the sustainability of the diversity procurement program as its biggest challenge. The initiative has built broad support within the company over the last decade, from the executive suite to purchasing managers across the company. She says it’s imperative that continue.
“The diversity procurement staff is too small to make this happen alone,” said Taylor, who is taking a new position with the company as Director of North America Defense and Government Sales in the Distribution Business Unit. “The engagement across the enterprise has been incredible and that must continue. The work is too important for anything less.”
[popovernew title="Spending on Diverse Suppliers: 2009-2016" button_text="Spending on Diverse Suppliers (Click to expand)" trigger="click" style="top" size="" type="btn-default" ]Here’s a look at the total amount of money Cummins spent in the U.S. with diverse suppliers in eight categories*.
2009 - $433 million
2010 - $545 million
2011 - $810 million
2012 - $890 million
2013 - $990 million
2014 - $1.2 billion
2015 - $1.3 billion
2016 - $1.1 billion
*The eight categories are: Minority Business Enterprises, Women Business Enterprises, Veteran Owned Businesses, Service-Disabled Veterans; Lesbian, Gay, Bisexual and Transgender (LGBT) Suppliers; SBA Small Disadvantaged Businesses; HUBZone Small Business Concerns and Philanthropic Suppliers.[/popovernew]