Enhancing Supply Chain Diversity: A Perspective from D.C.
A core focus of the Greater Houston Partnership’s One Houston Together initiative is to enhance spending with Minority Business Enterprises (MBE) within the Houston region. This work is advanced through quarterly Supplier Diversity Roundtables along with a bi-annual convening of chief purchasing officers (CPOs) within the Partnership’s membership.
The 2022 Houston MBE Economic Impact Analysis reveals there are 771 certified MBEs generating $8.2 billion in revenue across 18 industry sectors in metro Houston. Many of these MBEs have established relationships with global corporations and are above $10M in revenue. Houston businesses have a great opportunity to capitalize on our region’s diverse supplier base and to ensure a robust and competitive pipeline of suppliers in the future.
During the November 2023 convening of Houston CPOs, the Partnership welcomed two guest speakers to offer their perspectives on supplier diversity from their vantage point in Washington D.C.:
Carmen West, vice president of the U.S. Chamber of Commerce's Equality of Opportunity Initiative
Nigel Stephens, Principal, Phoenix Strategies
Amidst the evolving political climate related to diversity, equity, and inclusion programs in both the public and private sector, Carmen and Nigel offered thoughtful advice to help companies have the best suppliers at the table when making purchasing decisions.
Key takeaways from the discussion included:
Lead with the Business Case for Supplier Diversity: CPOs and leaders should lead discussions about supplier diversity with a strong business case. This includes highlighting key benefits such as supply chain resilience, recruitment and retention, access to new markets and customers, and innovation that supplier diversity can bring. It is important to document and measure the economic impact of supplier diversity both on the business and the community.
Strengthen Commitment to Supplier Diversity throughout the Organization: Chief Procurement Officers and Chief Diversity Officers should emphasize the importance of commitment to supplier diversity within their organizations. Supplier diversity is not the responsibility of just one department, or a single person’s job, rather, it should be embedded into the core values and culture of the company. This commitment should be reflected in the formal procurement process and considered as part of the overall business strategy.
Increase Collaboration and Connectivity: There is a need for greater collaboration and connectivity within the supplier diversity ecosystem. Companies, business support organizations like SBA and HMSDC and chambers of commerce should work together to share information, resources, and data on diverse suppliers. This can help overcome the challenge of identifying and accessing diverse businesses, especially those in underrepresented communities or industries. The Greater Houston Partnership’s One Houston Together Supplier Diversity Roundtable, CPO Convenings and the new MBE Accelerator Program are exemplars of this advice.
Improve Understanding of the Capabilities of MBEs: The mindset and perception about diverse entrepreneurs and their capabilities need to change. There should be a commitment to learn and understand what these businesses are capable of and how they can contribute to supply chains. This may involve corporate purchasing executives attending customized learning modules, training, and education to address the latest trends, innovations, shifting racial demographics and market demands that put today’s leading MBEs in the spotlight.
Leverage Existing Networks and Data: There is a need to leverage existing networks and data to support supplier diversity. Organizations like the US Chamber of Commerce, Minority Business Development Agency, Houston Minority Supplier Development Council, and Small Business Administration already have lists and databases of diverse businesses. Utilizing and connecting these resources can help identify and engage diverse suppliers. Carmen shared the U.S. Chamber is working on a new digital initiative to greatly improve this network of information sharing with more to come in 2024.
Broadly speaking, as an ecosystem dedicated to supplier diversity, CPOs can lead these efforts by emphasizing the importance of streamlining the MBE Certification Process. The certification process for minority-owned businesses has become burdensome and costly. The current system of multiple certifications from different organizations can be simplified and streamlined to reduce barriers and enhance access to opportunities. Companies should keep this complexity in mind and be flexible in the certifications they require.
For those interested in the Partnership’s Supplier Diversity programming and initiatives, contact Damean Townsend, Senior Director, Supplier Diversity at firstname.lastname@example.org.