IBM has long recognized that diversity is critical to fostering innovation, impacting our bottom line and delivering value to clients — and that supplier diversity adds to our competitive advantage while stimulating growth in a global marketplace and driving development in growing economies.
IBM created its supplier diversity program in 1968, before the existence of the U.S. Department of Commerce’s Minority Business Development Agency (MBDA) as well as the creation of both the National Minority Supplier Development Council (NMSDC) and the Women’s Business Enterprise National Council (WBENC). Our program’s goal is to provide opportunities to diverse suppliers who can add value to our supply chain in every region where we operate. Suppliers qualify as diverse by being at least 51 percent owned by people from an ethnic minority (as defined in each country or region), or by women, military veterans, people with disabilities or LGBT individuals.
In 2000, IBM was the first information technology firm to join the Billion Dollar Roundtable, an organization that encourages businesses to increase their spending with diverse suppliers. Since then, IBM has annually conducted greater than $1 billion in business with first-tier diverse suppliers in the United States. (Companies with which IBM has direct business relationships are considered “first-tier” suppliers.) With the growth of IBM’s diverse supplier initiative outside the United States, IBM since 2006 has conducted more than $2 billion in business annually with first-tier diverse suppliers globally. In 2016, IBM purchased $2.6 billion in goods and services from first- and second-tier diverse suppliers globally, of which nearly $1.3 billion was with first-tier diverse suppliers in the United States and $744 million with first-tier diverse suppliers in other countries.
IBM business conducted with first-tier diverse suppliers worldwide
($ in billions)
2016 spending with first-tier diverse suppliers by location
In 2003, IBM expanded the program beyond the United States to seek relationships with diverse suppliers in every country where we operate. Each geographic region has its own program manager, and each has established locally relevant criteria for diverse suppliers. IBM’s representatives actively engage in partnerships with external organizations involved with outreach programs to facilitate diverse supplier identification and development. We have also expanded our second-tier program beyond the United States, requiring our direct suppliers to seek diversity through their supply chains. Our goal is to seek suppliers that can provide value to our supply chain, and to promote economic opportunities for historically disempowered groups wherever we operate.
In 2016, three of IBM’s purchasing regions — Asia Pacific, Canada, and EMEA — showed growth in first-tier diverse supplier spending, with increases of $12 million, $11 million and $13 million respectively.
IBM is a member of many international affiliates of the National Minority Supplier Development Council (NMSDC), including the Canadian Aboriginal and Minority Supplier Council (CAMSC), Minority Supplier Development China (MSD-China), Minority Supplier Development U.K. (MSDUK), South Africa Supplier Development Council, Supply Nation, and WEConnect International. IBM employees are on the boards of CAMSC, MSDUK, MSD-China, and WEConnect International, where an IBMer is also chair of its board.
“IBM’s trust in our sustainable and scalable business models has helped make SDI the global company that it is today.”
— Carmen Castillo, SDI International
IBM often works with its strategic diverse suppliers to expand their capabilities and delivery models so they can respond more effectively to IBM’s requirements. For example, SDI International is a global integrator of non-strategic supply chains for labor- and services-based engagements and a first-tier IBM supplier. “IBM called on SDI to expand the scope and complexity of our delivery platform beyond the geographies of our mature market programs — such as those in North America, Europe and Asia — to incorporate emerging markets such as the Middle East, Africa and Latin America,” says Carmen Castillo, SDI International Corporation’s president and CEO. “IBM recognized that our long-tenured and proven programs could be quickly and cost-effectively scaled and customized to deliver quality-driven services across their growing enterprise. IBM’s trust in our sustainable and scalable business models has helped make SDI the global company that it is today, managing nearly $3 billion in our customers’ indirect spend.”
In 2016, IBM was again recognized for its supplier diversity programs:
- The Women’s Business Enterprise National Council included IBM in its list of America’s Top Corporations for Women’s Business Enterprises, for the 14th consecutive year.
- The National Minority Supplier Development Council named IBM its Corporation of the Year.
- WEConnect International recognized IBM with its China’s Corporation of the Year award.
- Employers Network for Equality and Inclusion, based in the United Kingdom, presented IBM its Inclusive Procurement award.
- Michael Robinson, IBM’s program director of global supplier diversity, was recognized as Leader of the Year by the NMSDC.
IBM will continue fostering diversity in its global supply chain as its business needs evolve, and will work with external organizations to support the identification and development of diverse firms in countries where we have purchasing needs.