Keith Lambert has been running his oxidation and mechanical services company, Oxidizers, for a decade. His 35 technicians service up to 700 aerospace and other manufacturing sites each year, ensuring that their pollution abatement equipment works.
However, it wasn’t until five years ago that it occurred to Lambert, who has worked in the environmental industry since 1990, to register as an accredited minority business enterprise.
Throughout his career, Lambert has often thought, “I just happened to be an African American. I’m the Black guy that works here with this particular company, or that group.”
Oxidizers became an accredited MBE through the National Minority Supplier Development Council. By that time, the company already worked with aerospace companies like Lockheed Martin, and manufacturers including Tesla and Cargill.
“I’ll have a project manager working on the project, and when I come down, people are a little shocked,” he said.
The movement to bring in diverse suppliers to the manufacturing industry is not new. General Motors had one of the earliest supplier diversity programs, starting in 1968. And aerospace manufacturer Boeing added one in the late 1990s.
Supplier diversity efforts support corporate DEI goals, but how helpful are they at bringing MBEs and other diverse groups into the industry?
While some aerospace companies are making public efforts to bring in these suppliers, the efforts don’t always succeed in making it easier for them to bid on or obtain contracts.
Signing onto a vendor platform is one thing. Getting the chance to actually sell goods or services is another, particularly in a sector where trust is critical and stakes are high.
Defining diversity in supplier relations
Diverse supplier definitions often differ by company. Some use “small businesses” and “supplier diversity” interchangeably, though they are different, Amber Hanlon, senior manager of social responsibility regulatory programs for Collins Aerospace, told Supply Chain Dive. Hanlon is also a past president of the Alliance of Supplier Diversity Professionals.
“When we say small business, we are always talking about the U.S. government program,” she said, referring to the definitions set by the federal Small Business Administration.
But supplier diversity includes more than small businesses, Hanlon said. It can include those such as minority-owned, veteran-owned, LGBTQ+-owned or woman-owned businesses — so long as the company is at least 51% owned by members of these groups.
Top industries for MBEs 2022, by revenue (in billions)
Manufacturing tops the list for minority-owned businesses in the U.S., despite the difficulties some aerospace suppliers say they still face in securing contracts.
Getting diverse suppliers a seat at the table
It’s hard to know the extent to which these aerospace manufacturers’ programs have created opportunities for diverse suppliers.
Boeing boasted of working with 6,000 small and diverse suppliers in 2020, including 600 veteran-owned businesses and 850 women-owned entities.
Lambert said his certification has increased communications between his company and manufacturers, but “I can’t say it’s brought about a revenue increase.”
He noted, however, that getting new aerospace clients can take years, regardless of diversity status.
This difficulty is partly due to the fact that providing goods and services to aerospace companies is more difficult than to other manufacturers, said Rhonda Dibachi, co-founder and CEO of HeyScottie, an AI-enabled metal finishing services marketplace.
“There are standards you have to conform to,” Dibachi said. “You don’t want to blow up a rocket. From a liability perspective, it’s much greater than the car window motor going out.”
Pilar Bernd started the Hispanic, woman-owned business The Bernd Group in 1989 to streamline the procurement process for high-tech manufacturers.
She got her initial customers through self-promotion and word of mouth. She later joined the National Minority Supplier Development Council and started attending its trade shows, where CEOs would share how to do business with them.
“NMSDC brings interested buyers to the table. That helps a lot. They already have a mindset that they want to do business with minority-owned companies,” Bernd told Supply Chain Dive. That said, “I don’t promote myself as an MBE. It’s more about who I am as a supplier.”
“It’s a challenge to get to the table, no matter who you are.”
While companies want to meet their diverse sourcing targets, Bernd said it can take at least a year to get onboarded as a vendor.
“Don’t expect a miracle with one meeting,” she said. “Once you show your value, [the companies you contract with] develop you and help you.”
Finding a champion inside the company can help the supplier increase the contract size or secure work at sister companies, as has been Bernd’s experience working with Collins Aerospace.
Hanlon knows the difficulty vendors face. She is now onboarding a vendor she’s been talking with for six years.
It takes patience and follow-up. Collins Aerospace has 70,000 employees and a few thousand in the supply chain, Hanlon said. But Hanlon’s supplier diversity team includes only four people.
Hanlon said diverse suppliers that wish to be added as a vendor should target specific products within a company, and include who their potential customers are.
“It helps us do a better job at supporting them,” Hanlon said. “I can target my search on who to get in front of, as opposed to a generic blast.”
But even for those who know their expertise and target customer base, finding the right contact is still an obstacle course, Oxidizers’ Lambert said.
“I’m in a specialized field. When I talk to people in a diversity department, they don’t know what to do with me,” he said, even if he tells them he provides technical support for pollution control equipment. “Then the tough part is finding the facility manager.”
Manufacturers struggle to track diversity programs
Even with supplier diversity programs in place, companies still have a hard time tracking the status of these contractors.
Dibachi only tells customers her MBE status when she needs to complete a service requiring a technical certification. Along with the certification, she’ll provide her ownership status.
Lambert has worked with some companies longer than he’s had his MBE accreditation. When he’s tried to tell some product managers that his company is an MBE, the client may not know what to do with the information internally.
“Maybe one or two (customers) have logged the information that we’re a minority-owned company. Most, unless it’s brought up to them, don’t even put it on the radar,” Lambert said.
“If you lead with diversity first, you’re missing the point. No one wants to buy a part that is made by a woman in this industry. They want to buy a part that’s made well. If this can help a woman-owned business, that is certainly wonderful.”
Co-founder and CEO, HeyScottie
Dibachi said her status as a woman-owned business is a “nice to have” not a “must have.”
“The ‘must have’ is that you can do the job,” she said.
“If you lead with diversity first, you’re missing the point. No one wants to buy a part that is made by a woman in this industry,” Dibachi said. “They want to buy a part that’s made well. If this can help a woman-owned business, that is certainly wonderful.”
Successful initiatives in bringing in diverse suppliers
Hanlon said that Collins Aerospace participates in the Department of Defense’s Mentor-Protégé Program, which helps small businesses get involved in the defense industry.
As part of the program, Collins Aerospace provides technical assessments to the vendor regarding supply chain, quality and process improvement needs. The government tracks metrics following program completion, assessing if the vendor increased its employee count, contracts with the company, and revenue.
Supplier diversity summits are another way to bring in more vendors. Boeing sponsors a diverse supplier summit that provides prospective contractors with an overview of the company’s current business priorities, as well as assigns a supplier advocate for each small or diverse business to help match their capabilities with the company’s needs.
Diversity is most helpful in bringing in a new point of view, Dibachi said.
“If you want diversity, you want it because you want to test the edges, you want to see what creative solutions you can find in new, undiscovered areas,” she said. “You don’t get creative doing the same thing over and over again.”