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The Home Depot (Atlanta, GA) began its formal supplier diversity program in 2003, says Michelle Sourie Johnson, the company's supplier diversity director. That was "primarily because of a shift in our customer base," she explains. "We were looking at increasing numbers of women and minority customers and the increased spending power they had in the marketplace. It made sense to bring in more MBEs and WBEs.
"Many other industries were heavily steeped in supplier diversity activities well before the home improvement industry came on board," Johnson notes. "Home Depot is the company that blazed the trail in supplier diversity in the home improvement industry."
Learning from others
"The first thing we did was try to learn from everyone else," she says. "For the first six or nine months of our program, our primary focus was simply learning from others."
They looked at banking, aerospace and the defense industry as well as other types of retail companies. "If we believed a company had a world-class supplier diversity program, we considered it. We talked to more than thirty different companies, learning different things along the way.
"No one is the best at everything," Johnson concludes with a smile. Some had good training programs for their buyers, some had great communication tools, others had done an excellent job with their websites. "We found the best in each of those areas."
Supplier diversity wasn't Johnson's first role at Home Depot. She had been in training and development and in purchasing, and had also worked for Wal-Mart. "I'm an attorney by training but I've spent most of my career in the retail sector," she explains.
Home Depot's Resource Institute
The company has strong affiliations with both WBENC and NMSDC, and Johnson is on the Georgia Minority Supplier Diversity Council, which is NMSDC's regional board in Georgia, and on WBENC's national board.
From this vantage point, she's noted that while both of those organizations, as well as the SBA and small business development centers, have done a good job in providing networking events for suppliers, "There were some gaps that no one was filling."
As a result, The Home Depot is the title sponsor of the Resource Institute (TRI, www.theresourceinstitute.org), a nonprofit designed to fill those gaps. "The Resource Institute's primary purpose is to act as a resource bank for suppliers. We want to help M/WBEs and other small businesses figure out where their niches are, to make it easier for the large companies to give them a chance.
"We also try to teach small businesses about access to capital, the differences between banks, individual investors and private equity funds, so they can decide what is right for their business. And we try to help private equity firms and investors connect with companies that need the capital."
TRI has been very successful in the state of Georgia where it originated. Now an executive director has been hired to run it fulltime and expand its reach.
In addition, the Home Depot has been a corporate sponsor in the Georgia governor's mentor/protégé program almost from the time its supplier diversity involvement began. The company is currently working with M/WBEs, and last year won an award as a top mentor.
"Everything is up for grabs"
"Everything we procure is up for grabs!" Johnson declares. "A supplier going to our website will find more than 400 different categories of products or services that we procure."
They include resale products that customers buy at the stores, resale services like in-home installation programs, and non-resale items for internal company use, from pens to computers to HVAC and of course the IT component: "all the things we utilize to keep our business running.
"We have diverse supplier representation in just about every area of the company and every category where we can find a diverse supplier that is nimble and flexible and offers a great quality product and good price.
"We've even added investment banks, not traditionally considered a supplier diversity area."
SupplierGateway built the website
SupplierGateway (Cleveland, OH) is a minority-owned business providing IT services. Home Depot was introduced to the company through NMSDC, selected it from among seventeen other firms, and gave it the exciting job of creating www.home depot.com/supplierdiversity, a special supplier diversity website now up and running.
"Their speed of delivery was much better than our internal team could promise," Johnson says. No surpise: SupplierGateway had lots of practice, working for "an impressive list of Fortune 100s.
"They created a system that gave prospective suppliers quick access to the appropriate buyers." This was not an easy task, Johnson notes, as Home Depot has more than 400 people, with a variety of titles and working in several departments, who have authority to make buying decisions.
"SupplierGateway built the system to be truly scalable, and when it was turned over to our internal staff the transition was painless," she says.
"It worked so well that it has been rolled out as our registration system for all suppliers, and has gained us a lot of recognition in the industry."
It has also gained SupplierGateway a lot of recognition. "We think they are a great example of a smaller company that has creativity and innovation, and we're very happy to recommend them.
"It is very helpful for them to be able to say that the fourteenth largest company in the U.S. is a major client."
Building SupplierGateway
Ade Solaru is one of three partners who own SupplierGateway. The company, he explains, has been in business since 1986, but started in a different area, doing large-scale systems consulting under the name of Mid America Consulting Group. Andrew Banks and a colleague from Deloitte and Touche started the company, with Major League Baseball as the first client.
Banks is now CEO and a partner of SupplierGateway; the third partner is Ade Solaru's brother Demo Solaru.
The Solarus' parents are from Nigeria, and both Banks and his former colleague are African American, but the company didn't look for work as a "diverse business" until a few years ago, Solaru explains. That started when the company became certified as an MBE with the Ohio regional affiliate of NMSDC, and as an SBA disadvantaged business.
The partners' first MBE job was a NASA set-aside, "a good project for accelerating our entry into different areas of technology," Solaru remembers. He had just joined the company with a 1987 BS in aviation engineering technology from Purdue, a 1993 MBA from Pepperdine, and six years in manufacturing management at McDonnell Douglas.
Banks, he explains, has a BSIE and an MBA. Demo's background is in CS, and he is the firm's computer guru.
Falling into the Internet
Eleven or twelve years ago, Solaru says, the company had an aerospace client that was working on a supply- chain-based savings consolidation, trying to reduce the cost of a major government program.
"They asked us to make recommendations on how to take cost out of the supply chain, and we made a lot of recommendations that had to do with information management.
"Unfortunately," Solaru recalls with a smile, "a lot of the approaches we recommended involved technology that didn't exist yet. The Internet was at its very beginning and very few tools were available. In the course of trying to build our software we had to create a whole bunch of new tools."
That's how SupplierGateway "fell into the world of the Internet," Solaru explains. "We created SupplierNet version 1.0, which is the underpinning of how our system works today. We are a Microsoft shop but our basic platform is proprietary."
Today, most of SupplierGateway's approximately fifty clients use its solution to track supplier diversity, among other apps.
"Our technology keeps changing on us," Solaru remarks. "We started as a service company, became a software company, and now we've cycled back to services as a software-as-a-service (SaaS) provider."
Valuable relationship
The Home Depot was SupplierGateway's first retail customer. By the end of this year Solaru expects it to be the single largest customer. "They are very aggressive about implementing our system in many different areas," Solaru says.
"We value the relationship of working with a Fortune 50 company that has critical business needs and has allowed us to be part of the critical path of their business process. We started with the supplier diversity program, and that gave us the opportunity to go in and prove ourselves in many areas. We are getting in on the ground floor of things that are really important."
As with most of its customers, SupplierGateway is focused on Home Depot's supply chain niche. "We're helping to fill the gap in our customer's processes."
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