Founded in 1922, Raytheon provides state-of-the-art electronics, mission systems integration, C5I™ products and services, and sensing, effects and mission support services for the defense industry, civil government entities and cybersecurity clients. But contained in that mission is another purpose, empowering small, diverse business entities. And as director for Raytheon’s supplier diversity program, Carol Wooden takes that role most seriously.
“Raytheon’s supplier diversity program follows a federal acquisition requirement that we subcontract a certain portion of our procurement dollars to small businesses. And we have truly leveraged the diversity within our supply base to drive competitive advantages for our customers and end users of our products,” Wooden explains.
But in that process, Wooden discovered something that many people often misperceive about small businesses.
“In our program, small and diverse suppliers tend to outperform our large suppliers, in terms of quality and delivery. We find that small businesses tend to be more lean and agile in their business processes and the way in which they execute business. Larger businesses often have many levels of bureaucracy and an abundance of policies and procedures just to make decisions and get things done. Small businesses don’t,” she states.
Wooden also shares, “Another thing we find interesting is the nexus between small business and innovation. Innovation in the U.S. really resides in small businesses. Think of the individuals that started Google or the individuals in the garage that started Amazon. Although our vendors aren’t working in garages anymore, it doesn’t mean that some of them didn’t start there. But it does mean that they do possess that kind of entrepreneurial approach to executing their business. So, we find that they perform better.”
With revenues north of $25 billion and more than 63,000 people globally, Raytheon relies meaningfully on numerous small businesses in its role as a major U.S. defense contractor and industrial supplier. Naturally, the U.S. Department of Defense (DoD) is Raytheon’s largest customer. And that directly affects Wooden and her supplier diversity program.
“The DoD has several government-funded programs that we leverage. One is the Small Business Innovation Research Program, where the DoD funds small businesses to develop cutting-edge technologies. Raytheon uses those technologies on our existing and future platforms. So, that’s one source of innovation for us. The second government-funded program is a mentor-protégé program. That’s where the DoD funds Raytheon and other large companies to create a strategic relationship with certain small businesses over the course of one to three years. And allows us to help small businesses build their business base, their employee base, etc.”
Naturally, with the DoD being its most significant customer, Raytheon suppliers must meet a number of federal guidelines. From quality requirements to business process requirements to special certifications, these stipulations are quite stringent, but with good reason.
“In looking for suppliers, much depends on the product or service that they’re providing. If they’re providing a service, we don’t need specific quality standards or requirements because they’re not providing us with parts that are going to fly in the exo-atmospheric space,” she said. “But in general, suppliers should do their homework in terms of what Raytheon provides for its customers, what kinds of products we then procure and source that feed into the systems that we deliver to our customers. So, for example, if they’re an electronic parts producer, there are certain industry standards they must comply with.”
Wooden also ensures that Raytheon’s suppliers reflect the surprising diversity of the DoD as well as the communities in which Raytheon operates and services. But she also believes that through its supplier diversity program, Raytheon serves an even higher purpose for the nation.
“One of the unique things we’re doing is maximizing and highlighting the capabilities that our diverse suppliers bring to our supply base. We’re looking beyond the government requirements about what we spend and we’re focusing our efforts on supplier development to ensure we maintain the U.S. industrial base by having viable small businesses as an integral part of it,” says Wooden. “We’re identifying innovative technologies within that small business base, to bring them to fruition on actual warfighter products. We’re strategically looking for and targeting those high-tech suppliers that can provide us with emerging technologies to help us meet the future needs of what the warfighter might need.”
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