HispanicBusiness

The economy continues its long, slow crawl toward recovery, with manufacturing and trade inventories up 0.4 percent in December. That was shy of what economists had predicted, but the value of inventories hit $1.6 trillion, an increase of 7.7 percent since December 2010, according to United Press International. Sales and shipments rose 8.9 percent during the same time period, to $1.2 trillion. Import prices and retail sales were also up.

Those are rays of hope for the diversity supply chain.

Money is only one metric used to establish the 25 Leaders in Supplier Diversity, but when payouts to diversity enterprises range from millions to billions, it's important.

PG&E Corp., No. 1 on the list, shelled out $1.13 billion to diversity suppliers in 2010, or 32.7 percent of its spend, according HispanTelligence, the research arm of HispanicBusiness magazine. The company spent $884.6 million in 2009. The No. 1 company last year, McDonald's Corp., which does not release exact figures, says it spends 55 percent of its purchasing budget on diversity suppliers.

Total spend among the top 25 increased from $25.7 billion in 2009 to $44.5 billion in 2010, HispanTelligence reported. For additional sources, see Statement of Methodology on Page 20.

AT&T spent $9.2 billion, 18 percent of its purchases, on diversity suppliers in 2010, according to Marianne Strobel, executive director, AT&T global supplier diversity.

Because Hispanic suppliers are a subset of the diversity supply chain, the spend on Hispanic suppliers is necessarily smaller than the overall diversity supplier spend.

"Last year, we spent more than $198 million with Hispanic suppliers," Alma Guajardo-Crossley, director of diversity initiatives at General Motors, said at the U.S. Hispanic Leadership Institute's annual national conference in Chicago in February. "Hispanics make up 22 percent of GM's supplier diversity program."

The 2011 numbers seem to be shaping up nicely, too.

Comerica in 2011 spent more than $64 million on tier 1 and tier 2 diversity suppliers, "which is approximately 45 percent of our opportunity spend," Teresa LeFevre, vice president, supplier diversity manager at Comerica, said. "Comerica spent more than $7 million with Hispanic-owned enterprises, or roughly 11 percent of the total diversity spend."

Generally speaking, tier 2 companies supply products to tier 1 companies, which supply products to original equipment manufacturers and other companies at the top of the supply chain.

"Verizon's total diversity spend in 2011 was nearly $4 billion," according to Mariano Legaz, vice president of supply chain services at Verizon, with more than $400 million going to Hispanic enterprises.

Chrysler Group LLC spent $4 billion with tier 1 and tier 2 minority suppliers in 2011, an increase of $1.4 billion over 2010, according to a news release.

"Verizon is investing more with diverse suppliers now than it did prerecession," Mr. Legaz said. "We appreciate the competitiveness, innovation and flexibility" that diversity suppliers provide.

"There are indications that the current focus on awareness has made many industries keenly aware that they must seriously consider incorporating 'diversity' not only in their supply chain, but also in their own business structure," Raul Espinosa, founder and CEO of the Fairness in Procurement Alliance (FPA), said.

Reschooling, Retooling
As Mr. Legaz points out, doing business with diverse suppliers is both the right thing to do and good business.