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W E B I N A R :
THE EVOLUTION OF
DIVERSITY IN
PROCUREMENT
Julie Holmes, Sr. CBM
757-934-1023
AGENDA
1. Market Conditions
2. The Grainger Tier 1 Distributor Alliance (DA) Solution
3. The Grainger Tier 2 Supplier Diversity Solution
4. Questions
MARKET
• Higher Education
• Commercial — Manufacturing
• National Accounts
• Federal Government
• Government/Defense Contractors
• State/Local Government
MARKET
• $8.5B market in 2022
• Growing 3.6% over 5 years
• Increasing mandates – particularly with
prime contracting opportunities
• Offer provides Grainger a competitive
advantage in the MRO space
TRENDS
• Efficiency
• Saves time
• Reduce/prevent downtime
• Just-in-time inventory
• Control expenses
• Meet goals & performance objectives
• Profit margins
• Increases top-line revenue
• Manage cost control/cost containment
TRENDS
• Contract realization & diversity goals
o Internal policies/procedures
o External rules/regulations
o Reporting
• Maintaining safety regulations
• Maintaining certifications
(CONT)
MARKET POTENTIAL
State Diversity/Small Business Goal
New York 30% MWBE
6% SDVOSB
Virginia 42% SWaM
Ohio 15% MBE
5% EDGE
Texas 21% TX HUBzone
California 25% SB and 3% DVOSB
EDGE (Encouraging Diversity, Growth & Equity; SWaM (Small Woman and
Minority; SDVOSB (Service Disabled Veteran-Owned Business)
POLL #1
If your organization has a diversity spending
target, what is the % of spend goal?
A. 0-5%
B. 5-10%
C. 10-15%
D. 15-20%
E. Over 20%
T I E R 1 : DISTRIBUTOR ALLIANCE (DA) POSIT IONING
WHAT IT IS
Tier 1 Distributor Alliance
(DA) is a network of DBE
resellers authorized to
resale Grainger® MRO
products.
MISSION
Provide Grainger® customers
with an offer to meet their
socio-economic goals or
mandates through the use of
certified diverse authorized
resellers.
*Disadvantage Business Enterprise (DBE) are companies 51% controlled by a socially
and economically disadvantage individual and may include woman, minority, or veteran
Confidential owned certifications.
DA EXPECTATIONS
• Customer-facing
• Responsible for specific end-customer service
activities
• Sales activity
• eCommerce
• Technical product expertise and quoting, order
processing and invoicing/direct billing
• Adhere to contract compliance with customer
PASS
THROUGH
PROGRAM
RELATIONSHIP DYNAMICS
ORDER
INVOICE
Sales Growth
Relationship Management
Value Added Services
ORDER
INVOICE
CUSTOMER
SOLUTION BENEFITS
Customer
• Provides an offer that allows customers to meet their
DBE goals
• Saves time/money by consolidating spend
• Benefits from Grainger’s reliable supply chain
• Access to more than 1.5 million products and value-
added services
Grainger®
• Differentiates Grainger and gives competitive
advantage
• Drives incremental sales
• Extends and compliments coverage/reach
• Promotes social responsibility
DBE Partner
• Provides access to more than 1.5 million products
• Enhances the DBE coverage/reach
• Provides a reliable supply chain
• Supports local tax base and provides jobs in the
community
Mutual benefit
&
value add
Seller
• Expands coverage through partnership
• Access to new opportunities & contacts
IS DA THE RIGHT SOLUTION?
• Do you have mandates or a social responsibility goals
for diversity spend?
• How is compliance driven throughout the organization
to use DBEs?
• Is this a one-time bid?
• What certifications or services are required (e.g., vet, minority,
woman-owned, etc.)?
• What capabilities and/or value-added service must a diverse business have
(e.g., installation, kitting, etc.) to support the opportunity?
• Is the geography (city/state) of the DA partner important?
• What e-commerce connectivity is required
for the DA partner?
TYPES OF DA PARTNERS
• Electrical providers
• Office supply distributor
• Janitorial service providers & contractors
• Hardware stores
All resellers in the Distributor Alliance offering go through a vetting process to ensure
scale, diversity and compliance. Grainger® prefers DBEs with strong ownership and
some criteria to include:
• Tenure
• Annual revenues
• Geography
• Back-office support
• Sales force
• Appropriate 3rd party certifications
T E I R 2 : SUPPLIER DIVERSITY
WHAT IT IS
A Tier 2 institution has a
requirement where they need to
buy a product manufactured by a
small or diverse business. They
buy this product from Grainger®
who gets the product from a
small or diverse business. These
products are designated on
www.grainger.com.
MISSION
Supports the growth of
historically underrepresented
businesses and work with
nearly 170 women-, minority-,
veteran-, service-disabled
veteran- and LGBT-owned
businesses in the U.S. that
provide more than 32,000
products to our company’s
offering.
SUPPLIER DIVERSITY PROGRAM
The Supplier Diversity Program provides access to
ESB/MBE/WBE/DV manufacturers and suppliers
through our catalogs and distribution channels.
Products provided by ESB/MBE/WBE/DV
manufacturers and suppliers are identified as part of
the supplier diversity program with the following
symbol.
The Supplier Diversity Program encompasses our
public and commercial sector customers and offers
32,000 products.
POLL #2
For which tier are your diversity spend goals?
A. Tier I
B. Tier II
C. Both Tier I and Tier II
HOW IT WORKS
Through our robust ERP and SAP systems, Grainger® can track ESB/MBE/WBE/DV
purchases of product and services and provide reporting addressing ordering, delivery,
and invoicing to members. Reporting can also provide insight to purchases from
Distributor Alliance members.
The list of ESB/MBE/WBE/DV products may be viewed at the following link:
https://www.grainger.com/content/supplier-diversity-customer-information.
OUR SUPPLIERS
Procurement processes can be slow and complex, with unclear
ownership, too many approvals needed to order, and multiple systems.
• Existing procurement solutions are made up of multiple tools
and standards that are difficult to understand, much less audit
and manage.
• Systems are rarely integrated and require handoffs and
duplication each step of the way.
• Custom tools must work with off-the-shelf solutions.
POLL #3
How do you locate diverse suppliers?
A. Certification agencies
B. Third-party providers
C. Google search
D. Through other diverse suppliers
E. Other
EVOLUTION
• Evolved from taking orders to providing solutions which allows us all to be successful
• Evolved from working “together” to creating true partnerships
• Involve partners in Grainger® training programs
o Importance of speaking the same message
o Importance of expanding our capabilities
o Importance of expanding our customer touches
TEXAS OPPORTUNITY LANDSCAPE
Texas small business goal - 21.1% with billions in annual spend
• Over 180 agencies — over 1,200 school districts with over
5m students
• 2nd largest state behind Alaska in area and behind California
in population
• Over 675,000 road miles —TxDOT spends over $3B per year
and only 8% with small business
SUCCESS STORY
• 7 DA partners
• Certifications span all areas — HUB, women-owned, Hispanic women-owned, Asian-owned, African
American & service-disabled veterans
• Coverage
o Multiple partners covering the state, hiring sales and customer service personnel and finding new
contacts to help grow the business
• Services allow us to better serve our customers
o Trailers
o Embroidery
o Kitting
o Branding of pens, hardhats, safety supplies, etc.
o eCommerce — to better manage orders from requisition to check
SUCCESS STORY
• Mentoring opportunities for all partners
o Business planning — create targets and monitor progress
o Sales Meetings — train and coach DA sales team members & DA members attend Grainger®
team meetings to educate our internal team members on new capabilities
o Quarterly Business Reviews for customers conducted by Grainger and DA partner
o DA partner knows your business and can find independent ways to add value
• Small business revenue grew by 10% in 2017 in Texas with a huge upside in front of us
(CONT)
Q&A
Questions?
Please submit your questions now into the question panel on your toolbar.
For more information on our Distributor Alliance program, visit grainger.com/distributoralliance.
For more information on our Supplier Diversity program, visit grainger.com/supplierdiversity.
Want to stay ahead of the curve on more topics like this?
Visit grainger.com/knowledge-center
