Supplier Diversity Innovations

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Over the past 3 to 5 years P&G has had one of the more successful supplier diversity programs. In fact, earlier this year they were inducted into the prestigious Billion Dollar Roundtable for those companies who have spent more than $1B in a year with diverse business enterprises. This was a great feat for which they should be highly commended.

This type of accomplishment cannot be achieved by accident. There must be a significant commitment and investment, starting with the CEO on down throughout the entire organization, to reach an incredible milestone that only a handful of companies have done. This also takes an innovative approach to supplier diversity that focuses on the supplier's long-term success.

One of those innovative practices involves helping their minority business enterprises (MBEs) to facilitate mergers and acquisitions. Here's two examples:

1.) Film Fabricators, Inc. (MBE) and Johnson-Bryce Corp. (MBE)
Proctor & Gamble helped facilitate the joint venture between these two MBE’s that resulted in them moving from Tier 3 suppliers to Tier 1 suppliers and a $100 million, three-year contract to produce packaging for five P&G brands. P&G recognized these companies potential, but that they had technical and financial limitations to be top tier suppliers.

2.) BBA Fiberweb and Amantea Nonwovens, LLC (MBE)
A $30 million commitment from P&G created the first nonwovens minority-owned supplier. Amantea will provide specialty nonwovens to P&G's North American diapers and global tampon businesses via a distribution agreement with BBA Fiberweb, an existing strategic P&G nonwovens supplier.

Amantea will be responsible for managing all logistics in the new contract. BBA Fiberweb will continue to be the manufacturer of this material for the period of the contract. During the 18 month distribution agreement, Amantea will build internal capability and construct a new nonwovens line to produce nonwovens materials for P&G. Plans are being finalized for a longer term supply agreement between Amantea and P&G that includes a new plant in Ohio.

As long as P&G continues to keep the long-term success of their suppliers as a top priority, them and their suppliers will enjoy long-term prosperity with one another.

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