Feature Model Practice Supplier Diversity Program
Pacific Gas and Electric Co.
Principle V: Business, Supply Chain, and Marketing Practices
2014 Challenge Submission
For more than 30 years, Pacific Gas and Electric Company (PG&E) has worked to increase supplier opportunities for woman-owned business enterprises (WBEs). The commitment to full inclusion of WBEs in PG&E’s supply chain is reflected in company policies, programs, practices and results.
“Our supplier diversity program reflects our customer base, which is one of the most diverse in the nation. We’ve developed partnerships that have allowed thousands of businesses to grow, hire and strengthen California’s economy. Those relationships have helped us to better serve our customers and improve the safety, reliability and affordability of the gas and electricity we deliver.”
PG&E has set company records for WBE procurement for more than a decade. In 2013, the company spent more than $1.1 billion with WBEs as direct suppliers and subcontractors, representing 20 percent of its total annual procurement spend.
PG&E’s CEO and president are strong supporters of PG&E’s leadership in WBEs inclusion. Company policy encourages employees to consider WBEs when making all purchasing decisions. By establishing and funding a formal Supplier Diversity program with dedicated staff to ensure the success of this policy, PG&E has moved beyond a goal of non-discrimination to one of effective advocacy and best practice leadership. WBEs provide essential products and services in every aspect of PG&E’s business--whether electric and gas operations, energy production, information technology, customer service or corporate support areas such as financial and legal services.
How does this model practice work?
PG&E’s success in including WBEs is a result of a collective company effort and various key Supplier Diversity Program initiatives:
• Line of Business Champion Program – the Supplier Diversity team, Sourcing and the Line of Business Champions implement cross-functional strategies that help identify opportunities for WBEs to work with each line of business and successfully exceed targets.
• Prime Supplier Program – PG&E works with its largest supplier partners to develop and increase their utilization of WBEs as subcontractors.
• Supplier Development Program – The company provides a number of WBEs with executive mentorship and business development support.
• Supplier Diversity Outreach Program – The Supplier Diversity team and over 100 volunteer ambassadors from across the company participate in over 100 local and national outreach events annually. The team meets and promotes WBEs, introduces prime suppliers to these firms and shares best practices.
• Technical Assistance Program – PG&E supports a broad range of capacity building initiatives for WBEs of all sizes. Many of these are conducted in collaboration with local community organizations.
o Signature Initiatives – like Diverse Suppliers Go Green, Diverse Suppliers Are Safe, Diverse Supplier Go Global are developed to train suppliers to gain a competitive advantage through leveraging safety, sustainability or global business.
o Scholarships are provided to attend accredited business development courses and sponsor diverse suppliers to obtain ISO certification training.
o The company works with other partners to sponsor valuable training initiatives on access to capital, business development and operational management.
How can I adopt this model practice in my workplace?
“Working with the cross-functional team, Agile has developed a Business Improvement Plan to be executed throughout the life of the mentorship. PG&E and Agile’s efforts are aligned in developing Agile in a more efficient supply partner, increasing business, and thereby lowering costs to PG&E through the learning and improvements that will be uncovered in the coming years.”
Maria Thompson, CEO
Agile Sourcing Partners
To achieve PG&E’s WBE spending goals, the Supplier Diversity team partners with the Sourcing organization, Line of Business (LOB) officers and their appointed Supplier Diversity LOB Champion to develop and implement strategies and programs to strengthen WBE, and overall diverse supplier participation in PG&E’s business. These include:
• Establishing officer- and director-level supplier diversity goals for each LOB
• Tracking and reporting supplier diversity spend results
• Leading cross-functional teams to achieve supplier diversity goals
• Developing and implementing WBE business development strategies with internal stakeholders
• Responding to WBE prospective supplier inquiries
• Managing internal and external stakeholder issues
• Developing supplier diversity communications and training plans
• Improving processes and project management
• Coordinating supplier diversity outreach events
• Engaging with community-based supplier diversity organizations
• Managing technical assistance and supplier development
A How-To Guide for Supplier Diversity Programs – PG&E created a detailed Prime Supplier Program Guide to help its prime suppliers develop and sustain their own robust Supplier Diversity programs. The guide provides a scalable and repeatable method for prime suppliers to not only participate in PG&E’s Prime Supplier Program, but also to establish their own supplier diversity program, to prepare and submit an annual plan, and to achieve sustainable results.