UTC throws the door open to diverse suppliers
UTC has been growing its diverse spend at 15 percent a year. Its Sikorsky division has a profitable relationship with Cherokee Nation Industries
Recently, an advertisement for UTC (Hartford, CT) proclaimed that “It’s much easier for diverse suppliers to get their foot in the door when it’s already wide open.” In fact, the UTC door has been open and the supplier diversity program in place for nearly four decades, notes Anand Stanley, director of supplier development.“When we look at U.S. operations, 7 percent of our current spend is with diverse suppliers, including women- owned enterprises. That comes to nearly $700 million,” Stanley says. “In fact, for the past five years UTC has been growing its diverse spend at 15 percent a year. That’s greater than the U.S. GNP,” he adds.
“We started more than three decades ago, focusing from the start on small and diverse businesses. It began with Pratt & Whitney, our aircraft engine unit, and today it involves every division of UTC and the UTC Research Center.” The other UTC divisions are Carrier, Hamilton Sundstrand, Otis, Sikorsky, UTC Fire & Security and UTC Power.
UTC was, in fact, a founding member of the Connecticut Minority Supplier Development Council (CMSDC), a regional affiliate of the NMSDC, Stanley notes. George David, the corporation’s chair and CEO, served as chair of the NMSDC from 1997 to 2001.
Half a billion and counting
UTC has a central supply management council made up of the heads of procurement for each business unit, and the UTC minority supplier development council reports to it directly. Both councils have members from all the UTC business units.
The UTC supplier diversity council, Stanley notes, is the focal point of sharing: not just the dossiers of likely suppliers, but best practices and processes.
“We also attend trade shows and the NMSDC annual dinner together, and organize our own supplier conference.”
Meeting at the MBX
For six years, UTC has run a yearly event it calls the Minority Business Exchange (MBX), bringing together current and future minority suppliers.
Claudia Muñoz-Nájar, UTC’s manager of corporate responsibility and supplier diversity, notes that the MBX is “a tremendous opportunity to get together with our current and potential M/WBEs to hear their perspectives.”
The supplier diversity council works together to develop leads for this invitation-only event. “This year alone we drew more than 300 attendees, more than 100 minority business representatives as well as some of our own tier-one suppliers who are interested in matchmaking opportunities with M/WBEs.
“Our message to our tier-one suppliers is that we expect the same level of commitment and leadership in supplier diversity that we have ourselves,” Muñoz-Nájar declares.
CMSDC’s business link
“We relentlessly pursue competitive, innovative minority business enterprises, women-owned enterprises and small businesses.” That includes veteran- and service-disabled veteran-owned business, small disadvantaged businesses and companies in HUB zones, Muñoz-Nájar explains.
“In the area of supplier development we utilize CMSDC’s business link mentoring program to match the CEO of a minority business with one of our own top execs.”
The mentoring pairs work on specific issues, mostly around business development and continuous improvement. The commitment is for one year, and the program has been in place since 2001.
Another very worthwhile program is the manufacturing extension partnership, again aimed at M/WBEs. And UTC sends a likely candidate to NMSDC’s Advanced Management Education Program at the Kellogg Business School each year.
In 2007 UTC was awarded Purchasing magazine’s coveted medal of professional excellence. This, Stanley notes with pride, is “the most prestigious award a corporation can get for supply management activities. Our supplier diversity programs and activities like the MBX definitely played a part in our selection.”
“We see an increasing focus on globalization of supplier diversity activities” Stanley adds. UTC’s former VP of supply chain, Kent Brittan, heads the NMSDCs Global-Link initiative. UTC’s 2006 MBX was focused on globalization, he notes, and was very well received by the supplier attendees. And UTC’s supplier diversity council has membership from Pratt & Whitney Canada.
UTC’s Sikorsky works with Cherokee Nation Industries
Cherokee Nation Distributors, a division of technical supplier Cherokee Nation Industries (CNI, Stilwell, OK), won UTC’s minority supplier of the year award in 2007, says Bryan Collins, CEO of CNI. The company’s award-winning distribution entity has a profitable relationship with Sikorsky Aircraft, a UTC division that manufactures military and civilian helicopters.
Cherokee Nation Industries, Collins notes, was established in 1969. Its aim was and is to develop businesses that create jobs within the Cherokee Nation, and to “help drive self-sufficiency for the future.” CNI is part of a family of Cherokee-owned companies that includes gaming, environmental services, professional consulting and more.
Company HQ is twenty miles east of Tahlequah, OK, the capital of the Cherokee Nation. “A big part of our employees come from this region,” Collins explains.
Electronics for aerospace
Cherokee Nation Distributors was established to assemble and stock electronic components for the aerospace industry. To begin they were mainly off-the-shelf components: purchased parts. But with time the company developed the core competency to go beyond parts stocking and distribution, and make up wiring harnesses and similar parts: “value-added kitting,” as Collins describes it.
By 2003 Cherokee Nation Industries had became a fairly large aerospace parts manufacturer. Cherokee Nation Distributors bid for and was awarded Sikorsky’s business in 2006.
“Because of their size, tribes can have multiple business units and qualify for 8(a) status on many fronts,” Collins explains. That’s how it is with Cherokee Nation Industries. “Sometimes the core competencies are the same and sometimes different; sometimes several tribal businesses will team up to go after a large account. We may even subcontract.”
Highest rating in aerospace
On the quality front, some of the businesses are rated 9100, the highest operating rating in aerospace, and the telecom division is proud of its TL9000 rating. Collins believes his group is the only Native American company that holds this certification.
Another entity is certified as a Cisco premier supplier. And as an MBE, Cherokee Nation Industries has HUB zone and SBA 8(a) ratings. It’s also a member of the Aerospace Industries Association.
Forty jobs and growing
About half of CNI’s business is commercial, half with government contractors. The Sikorsky account is currently supporting some forty jobs, and Collins expects that figure to grow. “We are working toward becoming an integrator, branching into metalworking to tie components together in an integrated solution, to be able to offer more capacity to meet Sikorsky’s needs.”
UTC has been very helpful, Collins notes. “We’ve been invited to the MBX and to special sessions with UTC staff, including program and quality reviews.”
Working for the Nation
The Cherokee Nation is a sovereign government, Collins explains, and as CEO of Cherokee Nation Industries he reports to the company’s independent board of directors and monthly to the tribal council. The Cherokees are the second largest Native tribe, topping 270,000 members. “Our focus is providing jobs to solidify families so the community can prosper,” Collins says.
“Our businesses help us keep our cultural identity, keep our Cherokee language intact, keep our families strong. Of our profits, 70 percent goes back into the business and 30 percent goes to the tribe for health, education and social programs.
“Every dollar spent with Cherokee Nation Industries goes back into diversity. We believe this differentiates us as a diverse supplier and a true diversity developmental company.
“Sikorsky understands this,” Collins concludes. “They understand what we’re capable of, and how their business helps our communities.”