Southern California Edison (SCE), one of the nation’s largest electric utilities and the principal subsidiary of Rosemead, California-based Edison International, serves 15 million people, 5,000 large businesses and 280,000 smaller enterprises in a region roughly the size of Alabama. Approximately 57 percent of its 12,800 employees are minorities; 30 percent of its elected officers are minorities or women. The 125-year-old energy provider ranks with Coca-Cola, Ford, General Motors, Johnson & Johnson, PepsiCo and Toyota as one of the top purchasers of goods and services from diverse suppliers.
In addressing the two dozen SCE contract managers participating in the first diverse supplier town hall meeting of the new year, Eric Fisher consistently repeated the two words that signaled the utility’s continuing evolution of its diverse supplier strategy: collaboration and engagement.
“Our ultimate goal should be working together as partners. Nothing can happen in this organization if we don’t work effectively,” said Fisher, who joined the utility in 2009 and has led the nine-member Supplier Diversity & Development group since 2013. “As supply chain professionals, our first point of business is ensuring we find the right suppliers to support your initiatives. To do that, our team members need to strategize with you; they need to work efficiently with you, and they have to deliver for you.”
That partnership philosophy is the foundation of a diverse supplier program that has become an economic driver for the company. Diverse suppliers are helping SCE lead and cost-effectively compete in a rapidly evolving industry that increasingly is shaped by advances in environmentally friendly and more efficient generating, storage and distribution technology. The economic imperative is why the company is determined to maintain its diverse spend at no less than 40 percent of its total investments in goods and services. In 2015, the latest year for which data are available, the company spent $1.8 billion, about 43 percent of its $4 billion in total purchasing, with more than 700 diverse suppliers
To continue meeting that 40-percent benchmark, which is nearly double what state regulators have asked utilities to voluntarily invest in diverse supplier purchasing, the company had to refocus its long-standing procurement strategy.
“We used to devote 80 percent of our efforts to diverse supplier outreach and only 20 percent to our internal customers,” explained Fisher, a 27-year procurement veteran who’s managed strategic procurement programs at several Fortune 100 companies. “Community outreach remains a vital and important part of what we do, but we’re devoting significantly more attention and resources internally.”
Sustaining a Diverse Supply Chain
“Our job is to provide a sustainable diverse supply chain that meets our customers’ needs and source suppliers who can meet SCE’s standards for quality, affordability and safety and deliver the return on investment we expect. In that respect, I don’t see diverse suppliers any differently than I do non-diverse ones,” he said.
For Fisher, it’s a job that typically requires a 14-hour workday to accommodate meetings with senior management and supply chain colleagues, one-on-one mentoring sessions with direct reports, community-based organization outreach and networking and performance review meetings with vendors on both U.S. coasts.
The company’s change in its purchasing strategy also required refocusing the discussion about supplier diversity from “equal spend” to “equitable access,” which places an increased emphasis on identifying, training and integrating diverse suppliers into SCE’s corporate supply chain. The company’s Entrepreneurial, Development, Growth and Education (EDGE) program serves as the umbrella for those efforts.
In addition to “Meet the Primes” matchmaking forums and contract-readiness workshops, EDGE offers technical assistance and capacity-building training to firms ranging from micro to large diverse businesses. A more intensive 18-month mentorship program, conducted in partnership with the Tuck School of Executive Management at Dartmouth College, provides select diverse suppliers with coaching and business education. Working with community-based organizations throughout California, SCE underwrites and conducts 80 training courses—taught by college adjunct professors and seasoned business professionals—for high-potential diverse suppliers in its service area.
More than a Career
“You can’t do this job just for the money,” stressed Fisher, a California native and an MBA graduate of the University of Redlands in Southern California. “I meet people from all walks of life, and it’s extremely rewarding to see them being given the chance to succeed and then watching their companies grow into larger successful businesses. For me, it comes down to what Martin Luther King, Jr. once said: ‘Life’s most persistent and urgent question is, ‘What are you doing for others?’”