Supplier Diversity Becomes Core Strategy
At Nissan North America Inc. (NNA), diversity has long been considered an integral part of the company’s success. From recruiting and retaining talent to senior leadership development to supplier diversity, NNA has a successful track record of promoting diversity and inclusion. But, earning awards for supplier diversity isn’t enough for the automaking giant. Recently, the company re-evaluated and re-engineered its supplier diversity program, focusing on making it easier for diverse suppliers to work with NNA and building the supply chain.
“After a self-assessment of our current program using the National Minority Supplier Development Council (NMSDC) best practices, it was determined that a modification would be beneficial to move the company further to the next level of a supplier diversity program,” said Marcella McCullough, NNA’s senior manager of supplier diversity and purchasing strategy. “Developing a more robust program requires the development of new strategies and processes to achieve or exceed NMSDC best practices. It is increasingly important to our senior leadership that supplier diversity be a core strategy. Therefore, we reviewed and benchmarked some enrichment processes and strategies that are now implemented into our program, transforming and heightening awareness of diverse suppliers throughout our organization.”
Among the new goals for NNA’s supplier diversity program is the addition of a women’s business enterprise (WBE) spend goal, along with its current minority business enterprise goal. NNA has asked Tier I suppliers to mirror its internal goals as well. Adding a WBE goal is merely a starting point for NNA, however, as the company works toward an even larger spend milestone to include other diverse categories.
“We intend to one day join the Billion Dollar Roundtable,” McCullough said, “and we have plans to strategically achieve that goal in phases.” The Billion Dollar Roundtable Inc. recognizes and celebrates corporations that achieve spending of at least $1 billion with minority- and women-owned suppliers.
Driving this reinvigorated supplier diversity focus at NNA is the recognition that as consumer demographics change, companies must reflect those changes to remain relevant. In addition, diverse suppliers often bring agility and innovative ideas to the table, critical components of staying competitive in the automotive industry.
“With the most diverse consumer base of any automotive manufacturer — multicultural consumers account for 38 percent of total volume for Nissan — we strive to have our suppliers be a reflection of our customer base and the communities where we live,” said NNA’s John Martin, senior vice president, manufacturing, supply chain management and purchasing. “As our [Nissan Motor Corp. Ltd.] President and CEO Carlos Ghosn said, ‘The richest solutions are found when diverse groups of people work together to address needs or develop innovative solutions.’ Diverse suppliers bring us creativity, quality and cost-effective products, and it creates sustainable supply chains and economic growth for all stakeholders.”
Added Gary Zoller, senior director, strategy, project management and control, NNA: “At Nissan we promote the inclusion of certified, capable and competitive suppliers in our sourcing activities, and we have a process in place to ensure such inclusion.”
Zoller and other Nissan executives stress that diverse suppliers go through the same checks and balances as nondiverse suppliers. “Supplier diversity is key for Nissan within this region,” said Larry Pavey II, Nissan Americas, director of purchasing, North America materials, chassis & stamping. “All of our suppliers go through a rigorous evaluation both prior to and throughout the sourcing process.”
Added Chandra Vasser, director of finance/purchasing controller, NNA: “We understand and celebrate the diversity of our customer base and reflecting that diversity in our supply base is a priority. Because we aim to have successful partnerships, our diverse suppliers are not given special sourcing privileges. They follow the same purchasing processes that we apply to our entire supply base ensuring they provide value to Nissan.”
Re-engineering supplier diversity
Those processes include recent changes Nissan has made within its supplier diversity program. One such change is the creation of a new commodity team so that there is a member of every key commodity working directly with the Office of Supplier Diversity. They serve as liaisons between their commodity areas and the supplier diversity team, allowing Nissan to be more proactive about finding opportunities to grow existing suppliers and identifying potential new suppliers for upcoming needs. “Diverse suppliers are matched based on their strengths within each commodity,” said Pavey. “Though Nissan does not give preferential sourcing, we are looking for long-term suppliers that can bring value.”
McCullough added: “We want diverse suppliers to know that Nissan is here so they’ll bid on opportunities. We really need those heavy-duty suppliers who are ready to come down South and work with us on our manufacturing floor.”
As a result of these strategic initiatives, the commodity teams recently awarded three new contracts to well-known, qualified and capable MBEs: Hightowers Petroleum Co. Inc., MCLJASCO Inc. and SET Enterprises Inc.
“The efforts of Nissan’s supplier diversity program have been extremely positive,” said Louis James, president and CEO of MCLJASCO Inc. “In fact, our current work in Canton, Mississippi, likely would not have been realized without its proactive support. It is clear that the initiative is being taken to connect suppliers with targeted opportunities for diverse suppliers.”
Stephen Hightower, president & CEO, Hightowers Petroleum Co., credits Nissan North America’s Office of Supplier Diversity with helping him navigate the complexities of working with such a large corporation. He also praised the organization for taking a new look at diverse suppliers as “companies that can deliver.”
“I give a lot of credit to the Office of Supplier Diversity at Nissan, and Marcella McCullough in particular,” Hightower said. “She was extremely helpful in providing the guidance, support and counsel needed to navigate within an organization as complex as Nissan. I’m also very glad to see the change in perception of diverse companies, such as myself. They’re not looking at us as diverse companies, but as companies that can deliver what they need. I think that’s a new paradigm for many companies of that size and nature.”
The automaker is also implementing new required supplier diversity training at its facilities in Michigan and Tennessee in the coming months, has already increased the number of staff devoted to supplier diversity and now holds regular review meetings with senior leadership. And, in the first quarter of next year, Nissan will host the company’s first-ever diverse supplier forum at the Nissan Technical Center North America in Farmington Hills, Michigan.
“This [forum] will allow our engineering and purchasing teams the opportunity to review the capabilities of key targeted commodities that are provided by diverse suppliers,” McCullough said.
All of these efforts — from increased resources to broader outreach — serve the goal of embedding suppliers throughout Nissan.
“Nissan is taking proactive strategies to offer its diverse suppliers significant business opportunities, while at the same time providing and extending additional support to our current suppliers to improve their chances for long-term viability,” said NNA’s Hiroki Hasegawa, vice president, purchasing and Renault-Nissan purchasing organization. “We are committed to our inclusion of diverse suppliers, and we request similar actions across our supply chain.”
By Melissa Lowery