accel advisors supplier diversity best practices 2009 [compatibility mode]

Accel Advisors

Strategic Sourcing & Supplier Diversity Services

Supplier Diversity Best Practices & Case Studies

Contents

• Firm Overview & Introduction

• Service Offerings & Results

• Supplier Diversity Best Practices

• Supplier Diversity Case Studies

Accel is a boutique management consulting firm led by former Fortune 1000 procurement executives and alumni of some of the world's leading consulting organizations.

Founded in 2005, we develop and execute Sourcing & Procurement-related cost reduction programs for large and middle market companies. In addition to our broad supplier management capabilities, we also have deep expertise in the areas of Supplier Diversity and Minority Business Development.

The intersection of our Strategic Procurement expertise and knowledge of the Minority business market has enabled us to help our clients reduce procurement costs while simultaneously increasing spend with Minority-owned businesses.

Our engagement results are typically “measurable” cost reduction, improved financial control, and sustainable improvements through optimized procurement organizations. Additionally, we have a track record of helping Minority firms secure growth capital through our relationships with leading private equity firms.

Firm Overview

Copyright 2009 Accel Advisors, Inc. All Rights Reserved.

– Sourcing and Procurement Leadership –

Our focus in Strategic Sourcing & Supplier Diversity has enabled us to develop deep expertise across numerous spend areas.

Service Offerings


Accel Service Offerings

Strategic sourcing

Strategic sourcing program execution

Spend analysis & assessment

Spend management

Procurement process

improvement

Supplier diversity solutions

Spend analysis & assessment

Supplier diversity strategy

development

Diverse supplier qualification &

selection

Program /policy implementation

Special procurement

services

Sourcing database development & management

Make / Buy analysis

0

10

20

30

40

50

60

70

80

90

100

110

$150M Medical

Equipment

MRO Company

$2B BPO

Company

$10B

Hospitality

& Gaming

Company

Global IT

Services

Provider

Cumulative Savings

Annual Savings

$M

illi

on

sA sampling of our recent client engagements have resulted in more than $100 million in

annual savings on $1.4 billion in sourced spend.

~Recent Client Results~

• Dollars sourced: $1.4 Billion

• Unique categories: 15

• Minimum client ROI: 500%

• Representative categories

▸ IT hardware

▸ IT software

▸ Telecom

▸ Temp/Contract labor

▸ Facilities services

▸ Office supplies & equipment

▸ MRO equipment

▸ MRO supplies

▸ Professional services

~Representative Statistics~

Results


We have generated annualized savings of 12 to 50% across multiple categories and industries including consumer goods, hospitality, manufacturing, healthcare and utilities.

Chemicals Raw materials Telecommunications

Specialty Chemicals Ingredients Office Supplies

Packaging General Contracting/Construction Landscaping

MRO Fleet/vehicles Training

Lab Supplies Temporary Labor Printing

Transformers Engineering Services Multimedia

NDE equipment Admin Services Cell Phones

Transmission Poles Hard Hats Marketing

Radios/mobile communication Security Real Estate

IT Hardware Call Center Travel

IT Software Fuel Office Equipment

Waste Management Computers PVF

Electrical Equipment Instrumentation Tools

Pumps Compressors Catalyst

Scaffolding Furniture Electrical Contracting

Facilities services Consulting Courier

HR Benefits Insurance Transportation/3PL

Gas Contracts Construction Material Safety Equipment

Results

~Representative Category Experience~


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Supplier Diversity Best Practices

8

Some of the Best Practices found among leading Supplier Diversity

Programs are as follows:

� Clearly documented and endorsed commitment from CEO

� Specific annual spend goals for sourcing/procurement from diverse businesses

� Diversity spend goals developed “bottom-up” at the category-level

� Attainment of goals tied to the compensation and performance plans of senior leadership

� Inclusion of Supplier Diversity in Company/Business Unit Strategies

� Head of the Supplier Diversity program is at the senior management level or above, and has control over corporate purchasing

� Consideration of minority owned businesses included as a formal part of the contracting procurement process

� Second-tier subcontracting to minority owned businesses also included as part of that process and written into the prime supplier's contract

� A comprehensive database of diverse owned business that is actively maintained and integrated into the purchasing process

� Purchasing system that tracks supplier diversity performance and can target specific contracts for additional focus, outreach, or consideration

� Visibility on the company's Internet website, including program details, contacts, and list of products and services purchased

� Strategic partnerships with ethnic chambers, publishers, and other organizations that can assist in outreach

9

Client Case Studies – Supplier Diversity

10

Client Situation

• Leading provider of business process outsourcing services

• Annual spend of $2 billion

• Client was challenged to meet supplier diversity requirements of various government contracts as well as increased scrutiny of commercial customers.

• Accel was engaged to:

• Conduct an assessment of current supplier diversity practices and requirements

• Make recommendations on improvements to current supplier diversity processes

• Recommend categories where diverse spend can be increased and recommend diverse supplier prospects

• Develop corporate supplier diversity metrics and targets

Result

• Identified opportunities to increase diverse spend by over 300%, while achieving about 10% in cost savings

• Developed Supplier Diversity Policies, Processes, and Metrics

• Recommended certifications strategies (e.g., NMSDC, WBENC, state/local/federal, etc)

• Developed Diverse/MWBE supplier strategies, including preliminary list of qualified prospective Diverse Suppliers by category

• Designed internal and external stakeholder communication plans

• Developed performance monitoring and reporting tools and targets, tied back to client contracts

• Designed a supplier diversity program management office

Project Approach

• Conducted High-level Spend Analysis

• Identified target pilot categories for Supplier Diversity Program

• Analyzed Procurement Processes and Technology

• Analyzed business and customer requirements around Supplier Diversity and built business case for supplier diversity

• Conducted competitor analyses around Supplier Diversity and benchmarked client against industry and general best practices

• Explored and identified revenue enhancement opportunities through diverse supplier partnerships

• Examined tier-2 diverse spend by client’s prime suppliers

Case Study Example — Global Outsourcing Company

Case Study – Supplier Diversity


11

Client Situation

• A Leading Company in Energy Sector

• Annual spend of $11.6 Billion

• Client had no formal Supplier Diversity Program and was interested in:

• Executing any “quick hit” opportunities that could drive them toward successful achievement of their $250 million diverse spend goal

• Developing diverse sourcing strategies, and preliminary list of qualified prospective diverse suppliers for target categories

• Developing strategies for fully integrating supplier diversity with sourcing and the other organizations within the company

Result

• Designed a comprehensive best-in-class supplier diversity program for client

• Identified opportunities to increase diverse spend and surpass the goal of $250M by launching a series of diversity sourcing efforts targeted around specific categories

• Recommended a fully integrated sourcing and supplier diversity technology tool for client

• Identified opportunities for client to improve, manage, and report its prime suppliers’ diverse spend (Tier-II spend)

• Designed and Recommended a complete supplier diversity program management office

Project Approach

• Conducted detailed analysis of client’s total expenditures

• Reviewed client’s Supply Chain Policies, processes and Procedures

• Conducted a comprehensive CAPS data comparison around supplier diversity

• Conducted a comprehensive competitor benchmark analysis

• Developed plans, timelines and estimates of resources (both internal and external) to implement and manage a successful supplier diversity program

• Analyzed categories of spend that could be quickly and easily leveraged to achieve client’s supplier diversity goals

Case Study Example — U.S. Energy Company



12

Client Situation

• Client: Government Regional Utility

• Annual Spend: $615 million

• The client was interested in an analysis of its contracts with respect to their Sheltered Market Program

• Accel was engaged to conduct an analysis that resulted in a list of spend categories that met the criteria of the district’s sheltered market program

• The client was also interested in identifying areas of SAP that can be better utilized to monitor, track and report on the SBE Program

Result

• Identified opportunities to shelter 12 material groups and about $30 million in spend for client under its sheltered market program

• Identified opportunities to increase client’s diverse spend to 20% of total spend

• Recommended techniques and tools for using SAP to effectively track, monitor, and report on supplier diversity

Project Approach

• Conducted an assessment of the client’s current SBE program

• Assessed the client’s procurement processes and vendor management tools to ensure that the right framework was in place for implementing the sheltered market

• Analyzed 50 material groups that accounted for 90% of spend to determine sheltering opportunity

• Developed recommendations on how to use SAP to effectively track and monitor client’s SBE program

• Conducted comparative analyses using a best-in-class utility as the benchmark

Case Study Example — U.S. Government Utility



13

Client Situation

• A leading national law firm identified the need for a more holistic diversity strategy that incorporated the benefits of hiring, selling and buying diverse.

• Client had no formal Supplier Diversity Program, but realized that it was becoming increasingly important among key clients.

• Accel was engaged to conduct a comprehensive analysis that encompassed a baseline assessment of current practices, benchmarking against best-in class and strategies for closing identified gaps.

Result

• Identified opportunity to increase the client’s diverse supplier spend from 7% to 15%.

• Opportunity was identified across six categories including office supplies, travel, recruiting, document management and PR/marketing.

• In addition to increased diversity spend, benefits also included a 5% reduction in procurement costs across the target categories.

Project Approach


• Reviewed client’s Procurement Policies, processes and Procedures





Case Study Example — National Law Firm



14

Client Situation

• A leading provider of health services within its local and regional markets, client realized the importance of implementing a Supplier Diversity Program that facilitated supporting businesses that fueled economic growth within its operating markets.

• Client was challenged by key internal and external stakeholders to develop and implement a world-class Supplier Diversity Program.

• Accel was engaged by the client executive leadership team to assist with the development and implementation of the program.

Result

• Identified opportunities to increase diverse spend by 90% by launching a series of diversity sourcing efforts targeted around specific categories including construction, collections, linen, printing and fleet management.

• Initiative resulted in 6% annual savings from related supplier consolidation.

• Developed a comprehensive best-in-class supplier diversity program .

• Identified opportunities for client to improve, manage, and report its prime suppliers’ diverse spend (Tier-II spend).

Project Approach


• Reviewed client’s Supply Chain Policies, processes and Procedures





Case Study Example — Multi-billion Dollar Regional Healthcare System



15

Rod Robinson, Managing Partner8044 Montgomery Road, Suite 700

Cincinnati, OH 45236Phone: (513) 562-1262

Email: [email protected]

Firm Contact Information – http: www.acceladvisors.com

accel advisors supplier diversity best practices 2009 [compatibility mode]

Business

caps data comparison

supplier diversity program

supplier diversity

sheltered market

diversity program

identified opportunities

rights reserved

ii spend