Toyota's relationships with diverse suppliers run deep
At Toyota, supplier diversity is more than opportunities
to bid. It's providing support and resources, driving growth and sustainability, helping communities thrive
'Our supplier diversity initiative began when we started building vehicles in North America in 1985," says Adrienne Trimble, manager of supplier diversity at Toyota Motor Engineering & Manufacturing North America, Inc (Erlanger, KY). According to Trimble, the program ensures that diverse suppliers are given a fair and equal opportunity to participate in all procurement activities. "Our supplier diversity initiative is intertwined throughout the company, which guarantees that each division plays a part in diverse supplier inclusion," she adds.
The company's supplier diversity processes have their foundation in the "Toyota Way," a corporate philosophy built on continuous improvement and respect for people. Supplier diversity at Toyota is "part of our corporate commitment to diversity and inclusion throughout the company," Trimble says. "Diversity is part of Toyota's corporate DNA."
Surpassing goals and raising the bar
In 1998, the initial target was to spend at least 5 percent of purchase dollars with minority business enterprises (MBEs). In keeping with the principle of continuous improvement, once that goal was achieved, a new goal was set for 7.5 percent. "We achieved that target a year ahead of schedule," Trimble notes. In 2006, a revised target of 10 percent diverse supplier spend was announced, and the company is well on its way to meeting that goal. And in early 2012, Toyota announced efforts to formalize the inclusion of women's business enterprises (WBEs), with a goal of reaching 2 percent of spend. "We recognize that to stay competitive, we need to meet and exceed the targets we have established," Trimble says.
The Opportunity Exchange
The program aims to create an environment that encourages networking. The Toyota Opportunity Exchange (OE) was created as a forum for diverse suppliers to establish business relationships and network directly with Toyota tier 1 suppliers. "This is part of our effort to help tier 1 suppliers meet our five percent tier 2 diverse supplier purchasing target," Trimble says.
Active Toyota suppliers attend OE as exhibitors, and diverse suppliers attend as invited guests. Prior to the event, current suppliers are required to submit their available opportunities, and diverse suppliers provide information on the products and services they offer. The event includes both developmental and informational seminars.
"In 2011, we tracked more than $50 million in new contract revenue resulting from connections made during OE. We encourage our diverse suppliers to take advantage of the events and resources that Toyota offers to build on their knowledge of the company," Trimble says.
New appreciation in economic downturn
Trimble says that although the company has long recognized the advantages of engaging a strong, diverse and local supplier base, the economic downturn has given the company an even greater appreciation for the role suppliers play in Toyota's success.
"I believe that much of the reason that Toyota was able to weather those difficult times was because of our dedication to ensuring the sustainability of our suppliers," she says. "Toyota places importance not only in helping diverse suppliers engage with our company, but also providing them with the support and resources they need to position their businesses for growth and sustainability. That's why our processes have evolved over the years to include services, events and initiatives that focus on supplier development as well as opportunities."
During the recession, the company offered access to specialized assistance and support, including site visits to MBEs to analyze strengths and identify potential improvements. Mentorship opportunities were also increased. As a result of these efforts, Toyota was able to retain its membership in the Billion Dollar Roundtable.
"Our strategy was to actively engage suppliers, ensuring that they remained in business, could rebound from any setback, and remained on the path of business growth and economic sustainability," she says.
"The economic impact on communities where our suppliers are located is also key to the business value of our supplier diversity processes," Trimble notes. "The dollars generated in these communities contribute to a higher quality of life for workers. In fact, we can directly link more than 40,000 jobs to our diverse suppliers. Toyota suppliers are not just helping us build better vehicles. Our suppliers are helping us build stronger American communities," Trimble says.
Toyota accepts certification through the National Minority Supplier Development Council (NMSDC) and the Women's Business Enterprise National Council (WBENC).
VisionIT: IT provider that gives back
For Christine Rice, president of VisionIT (Detroit, MI), helping others is a passion and the core of what she believes in. With twenty offices located around the country and two offices in Mexico, the IT provider grew rapidly after its founding in 1997. VisionIT now does business in almost every state.
"When my brother David Segura founded the company he was the sole employee. I joined less than a year later because we were growing so quickly and he needed my HR expertise; in one year we had twenty employees. David has a BS in computer science from the University of Michigan (Ann Arbor, MI) and I worked for EDS for almost fifteen years. His background is in IT and mine in HR and legal services, so it made for a great foundation," Rice says.
Segura is CEO and the majority owner, and VisionIT is now one of the largest MBEs in the country. "We're Hispanic and proud of our heritage," Rice says. "We were born and raised in Detroit and our parents were born here as well, but our grandparents came from Guadalajara, Mexico."
Because they were raised in an urban area, Rice and Segura are committed to maintaining offices in inner cities throughout the country. "Giving our young people access to technology has been a strong emphasis."
From the beginning, Segura felt that giving back to the communities in which the company operates was important. "We were always involved in volunteering around technology, mentoring kids and teaching them about computers. That's still a core component of what VisionIT is. The entire organization is committed to volunteerism and community involvement," says Rice.
Success through passion and hard work
Today, the company has revenue of nearly $300 million and 1,000 employees. "It took a lot of passion, hard work and dedication to get this far. Our goal is to continue to grow globally. Most of our clients are global companies. Our first client was in the food industry: Ball Park hot dogs. We met the CIO of the company when we were volunteering by helping inner-city students. The CIO had some IT work for us, a small opportunity that continued to grow," Rice says.
Clients in the automotive industry soon followed. The relationship with Toyota began in 2009 at a diversity networking event where David spoke. Afterward, he met an executive from Toyota who was impressed by VisionIT's experience. The Toyota executive expressed interest in doing business with the company, and championed VisionIT within Toyota, helping make the right contacts to build the relationship. But business relationships take time, and it was a year before VisionIT won a contract.
Now, Toyota is an important client. "Toyota has been a fantastic partner. We have similar cultures of high expectations. And, as our understanding of Toyota's IT infrastructure grew, the opportunities increased," Rice says.
VisionIT is not only a member of NMSDC, but also a Corporate Plus Member, part of an elite group of minority businesses that receive the council's stamp of approval based on their ability to support corporations around the country, financial status and overall stability. "It's an honor; you have to be nominated and meet strict qualifications.
"Having that designation helps the business. We're also finalizing our ISO-9000 certification. That goes hand-in-hand with working with Toyota," Rice says.