On the factors that truly make supplier diversity an effective strategy.
Ed Simon, director of business performance and supplier diversity at San Diego, Calif.-based California American Water (CAW), leaves little doubt about how he sees supplier diversity.
“We need to stop talking about supplier diversity as a program. It’s a business strategy and it’s time we started to think about it that way,” says Simon, who’s spent the past decade with CAW after previously working nine years in various positions at Missouri American Water, including as customer relations director and operations manager. Both CAW and Missouri American Water are subsidiaries of public utility company American Water.
Sourcing diverse businesses and signing master service agreements is the easy part, explains Simon, who was recognized as the Asian Business Association’s 2019 Corporate Advocate of the Year. The hard part is putting those businesses to work in ways that deliver tangible results to the organization. In that respect, Simon and his team’s work has paid dividends: during the five years he’s led CAW’s supplier diversity efforts, diverse spend increased from 24% to nearly 35%, reaching almost $33 million in 2019.
Creating New Connections
In California’s Central Valley, home to one-third of CAW’s more than 690,000 customers, the utility has been on an acquisition binge, absorbing Hillview Water System, Meadowbrook Water System and Fruitridge Vista Water Company, as well as other smaller systems. CAW is now hunting for diverse suppliers who can support these new operations. It’s why Simon was pitching a roomful of minority suppliers attending a Fresno Metro Black Chamber of Commerce meeting in late February. Some three weeks later, at CAW’s San Diego headquarters, Simon was recruiting two of those suppliers into the stable of diverse contractors.
Windell Pascascio Jr., president of Imperial Electric Service in Fresno, sat across from Simon in his first introductory meeting with CAW, pitching his firm’s capabilities and experience working on projects for the Fresno Unified School District and California Department of General Services. In Imperial Electric, Simon saw a potential supplier who could meet CAW’s electrical service needs and promised follow-up meetings with Central Valley operations managers.
Up next was Alex Arsenault, owner of Arsenal Well Drilling in Visalia, who was farther along the vetting process. By the end of a conference call with Northern California CAW operations and engineering managers, the group was scheduling next steps for how Arsenal could support the utility’s $1 million water-well workover program in the Monterey Peninsula, where CAW is planning to drill one new well annually for the next several years.
More than Hardware
The work that diverse suppliers do for the utility goes beyond electrical lines and water wells.
As Lee Anne Davis, CEO of PromoVentures, guided Simon on a tour of her San Diego facility, she explained how the 20-year-old marketing company produces branded apparel, premium gifts and promotional products for customers like Coke, Harley-Davidson, Makita, Miller Brewing and now CAW.
After being introduced at a 2017 WBEC-West conference, Davis and Simon began exploring opportunities to work together. A successful trial run in 2018 led to a major project this year creating a statewide promotional items portal and producing customized apparel for CAW’s annual Diversity Forum & Showcase. The event, which would have been held March 11 were it not for the coronavirus pandemic, was to have featured more than 120 attendees, 40 diverse vendors, CAW and American Water executives, and prime suppliers, as well as workshops, pitch sessions and one-on-one introductions. It is expected to be rescheduled for later this year.
Refining Supplier Diversity
Supplier diversity, like any business strategy, needs to constantly evolve. It’s why last year CAW conducted its first comprehensive analysis of how the utility works with its diverse suppliers.
The 360-degree evaluation involved in-person interviews with field operations and engineering managers; supply chain and supplier diversity staff; and, at this first stage, five of CAW’s 90 diverse suppliers. The survey was conducted by Bobby Robertson, president of Las Vegas-based Client Confidant, a Disability:IN-certified company. The survey revealed opportunities for increasing CAW’s diverse spend, addressing diverse suppliers’ performance “blind spots,” making it easier for diverse businesses to work with CAW, and improving how supply chain and supplier diversity staff support line units. Survey results will be used to establish diverse supplier best practices for American Water nationwide.
What makes supplier diversity truly effective as a strategy, noted Simon, are relationships, responsiveness, quality and value. “If you, as a diverse supplier, really want to help me, then tie back what you do to what we do at CAW.”
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