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EMPLOYEE RELATIONS
Employee relations // Supplier diversity
Taking supplier diversity
to the next level
Highlights
»»
Cummins tops $800
million in spending
with diverse suppliers.
»»
The Company
expands educational
initiatives to help
develop diverse
suppliers.
Very rarely these days is Gordon Fykes
asked, “What is supplier diversity?”
Instead, Cummins’ Director of Diversity
Procurement says he is increasingly asked
by purchasing personnel across the
Company, “How do I develop a strategy
to increase diverse supplier spending?”
Fykes says there’s a huge difference
between those two questions.
“We’re getting a lot of requests for a
deeper discussion,” said Fykes, who
expects he and Supplier Development
Manager Brian Sanders will be on the road
a lot in 2012 as a result. “I think we’re finally
getting away from the myth that supplier
diversity is simply about giving away a
slice of the business pie.”
At Cummins, diversity procurement is a key
business strategy with bottom-line benefits.
Helping diverse suppliers develop and
grow will eventually increase competition
for the Company’s business. That ultimately
results in lower prices and better quality for
Cummins’ purchases.
It also increases economic opportunity
in all of the communities where
Cummins employees live and work and is
consistent with the Company’s Corporate
Responsibility value to “serve and improve
the communities in which we live.”
A largely U.S. undertaking (although
the concept is starting to catch on
elsewhere), diversity procurement has
seen considerable growth at Cummins.
In 1995, the Company spent $35 million
with diverse suppliers in the United States.
Last year, Cummins recorded $810 million
in total diverse supplier spend or
12.2 percent of its total U.S. purchases.
LOOKING BACK
Cummins’ diversity procurement
program had several highlights in
2011-2012, including:
»»
Cummins is up to 25 percent in
spending with minority and womenowned
businesses to fulfill its contracts
with Chrysler Group LLC, maker of
the Dodge Ram heavy-duty trucks.
»»
The Company pushed back its goal to
reach $1 billion in spending on minorityowned
suppliers until 2014 because of
weakening in the U.S. economy although
Fykes says the Company still might reach
that goal by the end of 2012.
»»
Cummins expanded its educational
efforts in the area of diversity
procurement, sponsoring a competition
at LeMoyne-Owen College in Memphis,
Tenn. that asked students to develop a
model for a Fortune 500 manufacturer
to increase its business with minority
suppliers. The Company hopes to work
with the historically black college to
make the FOCUSS (Framework for
Opportunity Convergence and the
Utilization of Sustainable Solutions)
competition an annual event to help
develop young entrepreneurs.
»»
The Company continued working with
the Diverse Manufacturing Supply Chain
Alliance (DMSCA) to help develop diverse
suppliers. Cummins is sponsoring AMG
Engineering & Machining of Indianapolis,
Ind. in the DMSCA training and two other
Cummins’ suppliers – Magni-Power Co.
of Wooster, Ohio and GB Manufacturing
Co. of Delta, Ohio – are taking the
training on their own.
»»
The Company’s participation in the
National Minority Supplier Development
Looking ahead
Fykes said perhaps the most exciting
development has been the emergence over
the last few years of a number of diverse
suppliers capable of taking their relationship
with Cummins to the next level.
These companies want to be viewed as
strategic partners. They do more than just
provide Cummins with a part or service,
they suggest ways the Company can
improve its efficiency or product quality.
He cited, for example:
»»
Telamon Corp., a Carmel, Ind.-
based firm that works with Cummins
on supply management and IT issues.
»»
Turbocam International in Barrington,
N.H., which specializes in turbomachinery
applications.
»»
JBE Inc., a Hartsville, S.C., company
that provides complex and highly
technical sub-assemblies and
global supply chain management.
Spending on diverse suppliers
in millions of dollars
The total amount of money Cummins has been spending
with diverse suppliers has steadily increased since 2006.
800
EMPLOYEE RELATIONS
»»
Cummins joins
Automotive Industry
Group to share
best practices.
Cummins employees work
the booth talking about
supplier diversity at the
Indiana Minority Supplier
Corp.’s Automotive Industry Group also
paid big dividends. Members share
best practices as well as the names of
successful minority-owned businesses
they’ve worked with. Members of the
group include corporations like Chrysler.
Cummins was invited to join this group
and is the only member that doesn’t
make vehicles.
600
400
200
$293.30 million
$464.40 million
$571.60 million
2006 2007 2008 2009 2010 2011
$432.70 million
$544.90 million
$810.10 million
Development Council 2012
Trade Show in Indianapolis.
SUSTAINABILITY REPORT 2011–2012 89