Taking Creative License - increasing business for minority suppliers

Black Enterprise, June, 2000

Johnson&Johnson, with approximately 97,800 employees, is the world's most comprehensive and broadly-based manufacturer of health care products, as welt as a provider of related services for the consumer, pharmaceutical and professional markets. It makes MWBE suppliers accessible to all of its U.S.-based operating companies through the corporate Supplier Outreach Program

An automated program at the corporate headquarters in New Brunswick, N.J., it identities and categorizes suppliers by ethnic breakdown, commodity, affiliates, and geographic distribution. Every employee can use the electronic database to search for a supplier, based on specific needs

Johnson&Johnson has outreach efforts to identify minority- and women-owned suppliers and the company educates employees about its services. The company also shares information through the company Intranet, and through company-sponsored networking events. In addition, each operating company of Johnson&Johnson appoints a liaison to go into the local community and identify MWBE suppliers to serve the local company's needs.

"Our activities within local communities are only the beginning of our outreach program. We also encourage all of our major suppliers to, in turn, identify and work with minority- and women-owned business partners as they provide goods and services to our operating companies," says Teresa Fedec, director, strategic sourcing at Johnson & Johnson.

AMERICAN AIRLINES

AMR Corporation's Diversified Supplier-Program was established in 1989 to foster opportunities for minority and women-owned businesses to do business with AMR companies. In an average year, nearly 600 diversified businesses utilize the program to evaluate opportunities and identify potential customers. A database of current, and prospective, certified diversified suppliers interested in providing products and services to AMR is shared across the organization on a corporate Intranet. The program also serves as a liaison between the diversified supplier and their potential customer(s).

Purchasing, once a tactical activity, is being transformed to a highly strategic function through the implementation of best practices and the evolution of technology. Commodity managers, once focused on "low bid," now focus on managing supply chains to ensure the lowest total cost of ownership. The use of e-commerce in the corporate setting, once restricted to online requisitioning and electronic data interchange, is being transformed through new technologies such as on-line auctioning and the e-marketplace. E-marketplaces can help purchasing departments further reduce their cost of doing business through increased choice and price competition.

As major corporations move forward to develop or join on-line marketplaces, those suppliers who wish to continue doing business with them must do the same. Suppliers that have lagged in developing e-commerce capabilities were left out of the $114 billion B2B market in 1999, and stand to lose even more, as the market grows to over $2 trillion in 2004.