February/March 2008

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Supplier Diversity


Pepco Holdings has a solid relationship with Power Partners

“As businesses grow they use more of our energy services, so working with diverse suppliers is a business case to help us grow, too.” – Rhonda Mencarini

Supplier diversity manager Rhonda Mencarini: cooperating with purchasing.
Supplier diversity manager Rhonda Mencarini: cooperating with purchasing.

Rhonda Mencarini, manager of supplier diversity, explains that Pepco Holdings, Inc (PHI) is the largest energy-delivery company in the Mid-Atlantic region. Formed by the merger of Pepco and Conectiv, it serves some 1.8 million customers in Virginia, the District of Columbia, Maryland and Southern New Jersey through Delaware Power, Atlantic City Electric and various nonregulated subsidiaries.

The supplier diversity group for Pepco consists of Mencarini and three staffers. “We cooperate with the purchasing departments and work very hard,” she notes with a smile.

Supplier diversity at Pepco
Pepco’s supplier diversity effort focuses on doing business locally. It began in the 1970s, Mencarini says. “Then in 1989 we formed a separate minority business development department, and supplier diversity evolved from that.

“Like most supplier diversity efforts that go back that far we started as a social initiative, transitioned into a regulatory-compliance initiative, and now consider supplier diversity a business imperative.

“There’s a huge business case for supplier diversity in the areas we serve,” Mencarini adds. “PHI has a highly diverse service territory, and we want to do as much business as we possibly can with local suppliers, especially diverse ones.”

Growth in small business
Like other businesses, Pepco has found that its real growth for the near future is in small business areas. “The suppliers we meet there are the people who are hiring and contributing to the regional economy.

“As businesses grow they hire more people and use more services like ours. So working with diverse suppliers is a very clear business case to help us grow, too.”

Mencarini adds that she “likes to find ways to do business with small businesses and diverse suppliers on a direct-contact basis. I think there’s a lot of opportunity for PHI in direct-contact contracting.”

Certification and mentoring
Pepco accepts certification by local councils of WBENC and NSMDC, as well as a contract-supplier data form that’s “blessed by the SBA.”

The utility doesn’t mentor across the board with its small and diverse contractors, but it does some work in the area. “We just completed a formal mentoring program in conjunction with the Maryland office of minority affairs, and one with the office of economic development of Montgomery County, MD,” Mencarini notes.

Through the Montgomery County office, a member of her team has been mentoring Golden Opportunities, a small HR training company. Jim Golden, its owner, recently won the MD/DC Minority Supplier Development Council’s supplier of the year award. PHI was named corporation of the year at the same gala.

“It was a great night,” Mencarini adds with satisfaction.

Research and outreach
Does Pepco use any special techniques for finding appropriate MBEs, WBEs and other diverse suppliers? “Indeed we do,” declares Mencarini. “We employ internal research and external outreach.”

The research, she explains, involves herself and her staff going to department and other company meetings and “learning what’s on the horizon. Then, when we do external outreach, we target those procurement areas.”

If, for example, they learn about extensive new power lines going in, “We try to break that up into exactly what kind of suppliers we’ll need in that area, and make sure that we refer appropriate businesses that are technically qualified.”

“We’ll talk to anyone”
Mencarini is a former chair of the supplier diversity committee of the Edison Electric Institute (EEI). “We target suppliers who are doing or want to do business with the gas and electric industries. We share a lot with other EEI members, who provide a great network.

“We also work with WPEO, our regional chapter of WBENC, and partner with Howard University (Washington, DC), an HBCU, and the University of Delaware. They have programs and technical assistance for diverse suppliers.

“It works very well for us,” says Mencarini. “We will make ourselves available, we will talk to anyone, but we want it understood that people must do their homework first. That way we maximize everyone’s time.

“We are very hands-on,” Mencarini concludes. “We want to talk to you, find out what you do and how it adds value to PHI. It all goes back to credibility within the business community. And within Pepco we bring in diverse suppliers who are ready to do business!”

Doing business with Power Partners
Power Partners’ Sherrie Ford: more agile entities grounded in local needs.
Power Partners’ Sherrie Ford: more agile entities grounded in local needs.
Dr Sherrie Ford is chair and executive VP for Power Partners, a manufacturer of pole-type transformers for the electric power industry. She’s also the founder of Change Partners, an organizational consulting firm. Both companies are headquartered in Athens, GA.

“Sherrie Ford and I first met at an EEI supplier diversity conference,” Mencarini recalls. “I got interested in her locally made, fully rated transformers.

“There aren’t many diverse manufacturers of quality pole-type transformers, certainly no others in our area. I brought back the information and we thought, ‘They meet our specs, let’s go with them.’”

Power Partners’ down-home focus in the state of Georgia fits Pepco’s philosophy very well. “Ford is helping to grow the regional economy in Georgia,” Mencarini says. “She took over an old ABB plant at a time when headcount had dwindled significantly, and ABB was looking for a way to manufacture and distribute pole-type units to maintain a much-needed portion of their portfolio. She’s done a tremendous job of boosting the economy in Athens, GA, while providing the utility industry with something we all need.”

Stamp of approval
Electric power utilities are highly risk-averse and safety conscious, Mencarini reiterates. “We must have quality product because our customers need reliable electrical service and we need to keep our customers and our own employees safe.

“So we looked at Ford’s manufacturing facility, just as we do with others, and we found they were producing a transformer that was true to the ABB standard of quality with no change in the manufacturing process. We took them on as one of our pole-type suppliers, as have many other utility companies in the U.S. and Canada.”

Dr Ford takes hold
Dr Ford notes that her PhD, from the University of Georgia, is in English rather than some technical subject. “But my PhD work gave me thinking tools and the ability to evaluate legacies in many fields,” she says.

At the start, technical writing qualified her for a job at a local technical institute. “I moved into management there as VP for business and industry services. I left in 1996 to start Change Partners, an organizational consulting firm, and ABB was one of many manufacturing clients.”

Transforming the ABB plant
ABB’s Athens, GA plant was not performing competitively, Ford remembers. “Sometimes large corporations find it difficult to optimize a local factory. But that’s often where success can be found, in smaller, more agile local entities grounded in local needs.”

So Ford took over the Athens plant. “I inherited a great work culture and a client base that had been in place for years. Today my plant is known as the ‘hurricane plant’ because we can supply transformers very quickly in an emergency.”

Ford’s initial relationship was with Atlantic Electric and Delmarva, two regional energy-delivery utilities. Power Partners handles inventory for them and takes an active role in their supply chain with lean manufacturing and with “pull systems.”

In a pull system, Ford explains, the manufacturer delivers units just as they are needed, saving both manufacturer and customer carrying costs associated with stockpiling “just in case.” Ford is now in, or entering into, this relationship with several other southern and Mid-Atlantic utilities.
WBENC confirms that Power Partners is the thirteenth-largest woman-owned business in America, notes Ford, the majority owner. “In the beginning my partner Steve Hollis and I never thought of it that way,” Ford says.

But clients advised them to get into WBENC. “A number of customers wanted us to get the certification immediately because it’s a very good value-added feature for their customers.”

Launching Power Partners Solar
“We knew that the Athens facility was not going to be a financial success overnight just doing lean manufacturing of transformers. So, after a world-class brainstorming session with colleagues and industry experts, we settled on mass production of solar water heaters as a long-term strategy.”

Ford and Hollis launched Power Partners Solar at the Athens plant. “We are the first mass producer in America of lightweight, roof-mounted solar water heaters for ‘green,’ renewable energy. We are very excited about it,” she says.

A major southern utility has already bid for a thousand units, as has a utility in Lakeland, FL. “We’ve had individuals knocking on our door asking how soon they can get one. If Pepco decides to go in this direction, we’ll be ready to supply them,” Ford declares.


Pepco Holdings Inc. Logo.
Pepco Powerpartners Logo.

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