companies think about the future
of their supply chains, procuring
from diverse suppliers has
become more of an economic
necessity than ever, argues
Leonard Greenhalgh, director of
programs for MWBEs at the Tuck
School of Business at Dartmouth
College.
Why? “By 2050, today’s minority
supplier will be a majority-owned
supplier,” he says. “If you don’t have
MWBEs in your supply chain, you’re
going to fall behind the competition.” Diverse suppliers…
Provide access to emerg-
ing markets in the United
States. “Tomorrow’s consum-
ers are increasingly coming from
underserved communities,” says
Greenhalgh. “The company that
wants to develop products that
will connect with the Hispanic
community, the hip-hop community or the disabled community
is not going to do that with a
supplier base made up entirely of
XCEL ENERGY: HELPING WMBEs GROW
In 2004, The Ash Group, a
woman-owned startup, was
awarded a contract to provide
administrative and technical staffing to Xcel Energy.
Although more established
companies were competing for
the contract, The Ash Group
eventually won the account.
The reason: Kay Livingston
Ash, the company’s founder,
had several years of experience
as an executive at a Fortune
200 staffing company. Today, The
Ash Group is one of several
top staffing service providers to
Xcel Energy. “When it comes
to supplier diversity, Xcel walks
the talk,” says Ash. “The company enables diverse suppliers
to grow.”
Focusing on competent
MWBEs that can supply core
products and services is one of
the hallmarks of Xcel Energy’s
supplier-diversity program, says
Murugan Palani, manager of
supplier diversity. “We actively
look for diverse suppliers with
unique skills and perspectives
that can help us keep the lights
on for our customers,” he says.
This strategic approach
to procurement has helped
Xcel Energy increase its spend
over the past five years with
MWBEs by 61 percent. Today,
the company spends more than
7 percent of its annual purchasing budget with MWBEs. Xcel
Energy’s goal is to constantly
strive to increase diversity
spend to meet and exceed the
industry average.
To help grow its pipeline of
suppliers, Xcel Energy formed
alliances with organizations
such as the National Minority
Supplier Diversity Council
and the Women’s Business
Enterprise National Council.
Xcel Energy also works with
local nonprofits and chambers
of commerce representing
women, Blacks, Latinos and
other underrepresented groups
to sponsor outreach events.
In addition, Xcel Energy has
provided scholarships to more
than 10 MBEs over the past five
years to attend the executive development program at
North western’s J.L. Kellogg
School of Management.
“When you’re working with
diverse businesses, you’re getting lean, efficient and innovative
companies,” says Palani. “Having
that perspective provides Xcel
a strategic advantage.”
