Caterpillar's Supplier Diversity program was recognized as one of the "Best of the Best" by the Black EOE Journal in its Summer 2013 issue. The magazine partners with three other diversity publications to leverage non-biased evaluations of U.S. companies on their outreach and accessibility to the African American, Hispanic/Latino, Female and Veteran populations.
"We cannot be an effective, global leader without diversity throughout the enterprise, and that includes our extended enterprise" said Frank Crespo, Caterpillar's chief procurement officer (CPO) and vice president of Global Purchasing. "It's more than social responsibility and living Our Values in Action. Developing an integrated supplier network which mirrors the breadth and diversity of Caterpillar's customers just makes solid business sense."
Supplier diversity is so important to Crespo that one of the Global Purchasing Division's SMART goals is to increase the amount of diversity spend; that is, how much Caterpillar spends on materials procured from suppliers who meet diversity requirements. It has increasingly become one of the many variables discussed as a means to strengthen the supply chain.
Charly Ugorji has been at the helm of Caterpillar's Supplier Diversity program for the last two years. He credits many factors for the program's success thus far. But three are at the top of his list: Crespo's arrival at Caterpillar, a strategic alliance with Caterpillar's Global Diversity & Inclusion Office and efforts to change perceptions about the program.
"In essence, what we are really trying to do is to eliminate the entitlement perception and instead focus on business decisions that identify diverse suppliers with the ability to support Caterpillar's long term expectations for cost, quality, delivery, shipping and management performance," Ugorji said.
Another key success factor, according to Ugorji, is greater transparency in how procurement teams can identify diverse suppliers and be able to track their performance. This is done through a new analytics tool, which is a significant advancement from the former technology that was employed. "We went from an 'as requested only' mainframe report, which lacked various views and details, to an on-demand report with intricate analysis, trends and forecasting ability," said Joe Crocker, procurement manager for supplier diversity.
While the program has made great strides, there are several new initiatives in the works, including an enterprise "Diversity Council" and a seminar on diversity supplier development.