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Creating Supplier Diversity Success: The CDW Way
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SOUTHPORT, CT –/ -- DiversityBusiness.com /- As a prime supplier to the government and other large organizations, CDW Corporation was focused on small business contracting but realized in late 2006 that there was an increased need for diverse supplier spend throughout the company. Customers were contacting their dedicated account managers to ask how CDW could help them achieve their diversity spend goals and as a direct result, CDW representatives felt it was important to take a hard look at our own processes and how diverse spend impacted our contracting and purchasing opportunities as well as our customers needs. To strategically identify how to better meet these needs, CDW needed to create a Supplier Diversity program.
Where to Start?
As a first step in the process of creating a supplier diversity program, CDW joined the National Minority Supplier Development Council, Inc. in 2006 and attended their annual business conference in San Diego, CA. At the conference, information relating to the business process and business advantages of supplier diversity programs were presented that were instrumental in giving CDW the tools to craft our own program.
Well armed with data, process and benefits supporting supplier diversity programs, we began building a foundation that included supplier diversity in CDW’s procurement strategy. As CDW does not manufacturer any products and our purchasing process is not centralized, we had to look at:
- what products/services were being purchased and from who;
- what criteria of those purchases was most important and why;
- how do we improve the process to create opportunities for diverse suppliers.
As a result, we found out a number of interesting things such as:
- not every purchasing decision was being made on lowest cost;
- relationships and loyalty are important values at CDW;
- customer service is a large piece of the procurement equation;
- buyers are unaware of how to find diverse businesses to provide opportunities to.
Leadership
In order to meet the demands and requirements of introducing supplier diversity into procurement decisions, CDW created a Supplier Diversity Manager and Supplier Diversity Advisory Council (SDAC) consisting of 18 members of CDW’s senior management team from around the company and chaired by Matt Troka, vice president of Product and Partner Management. The council is referred to as “the tentacles of supplier diversity” within the organization. The council members engage in developing policy and advocate for increased utilization of diverse suppliers in their respective areas.
The council approaches supplier diversity from three angles: internal, external, and strategic. This formula addresses our initiatives to increase opportunities for goods and services while providing our customers with the best experience. Understanding what CDW was buying, from who, and the criteria valued by each area, allowed the Supplier Diversity Manager and Council Members to target specific commodities and introduce qualified diverse suppliers for potential opportunities.
Information Sharing
Providing a solid foundation of understanding around the importance and value of supplier diversity is crucial. At CDW, we’ve held over 30 supplier diversity training sessions in 2008 with the buyers, managers, and sales personnel which have focused on key components such as how to create an opportunity to leverage existing supplier relationship by awarding more business opportunities. In addition, we’ve created a section on the internal CDW web site that is dedicated to the program and is filled with unique training materials, FAQ’s, glossary, and basic presentations that internal customers can access and use at any time.
Success Story
With the newly created Supplier Diversity program, we have had several successes of increasing opportunities and awarding contracts to diverse suppliers. An example of one of these successes was in our Marketing Operations department. A small minority printing company from Chicago had contacted CDW on a number of occasions to ask for an opportunity to meet with our print procurement team. After a review of capabilities and experience it was determined CDW didn’t have an immediate need and wasn’t sure if there would be one anytime soon. Undaunted, the vendor did a great job of following up and within a few weeks was contacted for a special print project by the CDW team. The vendor provided pricing as requested and even suggested an alternative paper product with similar look and feel but at a lesser cost. With samples and press check, CDW proceeded with the alternative product and saved several thousand dollars. This example is a true testament that diverse suppliers not only bring quality and expertise but are focused on meeting cost savings goals of the organization. Without that introduction, they may have not had the opportunity to bid and CDW wouldn’t have saved that money.
Company wide diverse spend continues to increase since the inception of the program. The increases are a direct result of targeted initiatives as well as supply chain analysis. CDW realized that some of our legacy suppliers were diverse but lacked proper certification. With a combination of new and existing suppliers, CDW’s M/WBE spend in the first three quarters of 2008 has surpassed all of 2007 and expected to exceed $200M vs. $158M in 2007. CDW continues to track other small diverse business category spend and has seen total diverse spending increase from 4 percent of total purchases to 7 percent or $360M.
In addition, since May 2007, the program currently includes partnerships with 65 minority-owned businesses, 101 women-owned businesses, and 39 veteran-owned businesses, as well as additional classifications such as small, disadvantaged, and disabled.
Next Steps
At CDW, we run on the mantra that success means never being satisfied. Our continued focus on supply chain improvements will continue to create opportunities for diverse suppliers. Some of the next steps of the supplier diversity program include adding diversity goals into performance plans of coworkers and management, and asking coworkers to think about diversity in how they measure success. Additionally, CDW will be launching a Tier II program with the top 20 manufacturer and distributor vendors in January 2009. In addition to requiring spend reporting from these vendors, CDW is creating a resource portal for these companies to search for vendors that can service the CDW account.
For any company looking to create a supplier diversity program, remember that the program itself should do more than measure spend, it needs to create opportunities for these diverse suppliers and it is the organization’s responsibility to work with your primary contacts to open those doors. In doing so, you may see cost savings and/or better service levels. For CDW, advocacy, empowerment and growth of under utilized minority businesses are the core elements of our Supplier Diversity program. As we continue to grow and focus on internal and external needs and requirements, the work is far from over. However, with continued executive engagement and customer satisfaction as a result of the program, we look forward to new and different ways to enhance CDW’s Supplier Diversity program.
About Nita Smith:
Nita Smith is the supplier diversity manager of CDW, a leading provider of technology products and services for business, government and education.
Smith is responsible for developing and driving the supplier diversity program for the corporation. She is also responsible for forming strategic partnerships with suppliers and third party organizations and assisting customers to leverage CDW in their own supplier diversity goals.
About CDW:
CDW is a leading provider of technology solutions for business, government and education. Ranked No. 34 on Forbes’ list of America’s Largest Private Companies, CDW features dedicated account managers who help customers choose the right technology products and services to meet their needs. The company’s technology specialists offer expertise in designing customized solutions, while its advanced technology engineers can assist customers with the implementation and long-term management of those solutions. Areas of focus include notebooks, desktops, printers, servers and storage, unified communications, security, wireless, power and cooling, networking, software licensing and mobility solutions.
CDW was founded in 1984 and as of September 30, 2008 employed approximately 6,900 coworkers. In 2007, the company generated sales of $8.1 billion. For more information, visit CDW.com.
About DiversityBusiness.com
Launched in 1999, DiversityBusiness, with over 50,000 members, is the largest organization of diversity owned businesses throughout the United States that provide goods and services to Fortune 1000 companies, government agencies, and colleges and universities. DiversityBusiness provides research and data collection services for diversity including the "Top 50 Organizations for Multicultural Business Opportunities", "Top 500 Diversity Owned Companies in America", and others. Its research has been recognized and published by Forbes Magazine, Business Week and thousands of other print and internet publications. The site has gained national recognition and has won numerous awards for its content and design. DiversityBusiness reaches more diverse suppliers and communicates more information to them on a more frequent basis then all other organizations combined. We also communicate with mainstream businesses, government agencies and educational institutions with information related to diversity. Our magazine reaches over 300,000 readers, a monthly e-newsletter that reaches 2.4 million, and website visitors of 1.2 million a month. It is a leading provider of Supplier Diversity management tools and has the most widely distributed Diversity magazine in the United States. DiversityBusiness.com is produced by Computer Consulting Associates International Inc. (CCAii.com) of Southport, CT. Founded in 1980.
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