Creating & Sustaining Your Tier 2 Program KEEPING IT HOT

Transcription

1 Creating & Sustaining Your Tier 2 Program KEEPING IT HOT

2 Presentation by Madlyn B. Bagneris Manager Supplier Diversity Entergy June 6, 2006

3 What is Second Tier? Second Tier refers to the utilization of minority and women-owned owned businesses. Second Tier purchasing is a relative term in that it is a function of who is the customer. From a customer s s perspective, a first tier supplier is a supplier that invoices the customer for goods and services rendered directly by the supplier. A Second Tier supplier is a supplier that invoices the first tier supplier for goods and services rendered.

4 Why have Second Tier Suppliers? To maximize opportunities for MWBEs to participate as suppliers of goods and services. Second Tier should serve as an enhancement to, and not as a replacement for, existing initiatives aimed at increasing meaningful opportunities for MWBEs to participate as first tier suppliers.

5 Types of Second Tier Expenditures Direct Spend is defined as: Second Tier supplier products and services which CAN be identified in support of Customer requirements. Indirect Second Tier spend is defined as: - Products and services which CAN NOT be identified in support of a specific CUSTOMER requirements.

6 HOW TO BEGIN? 1. Analyze your supplier base 2. Select a preferred list of Prime Suppliers and prioritize the best opportunities for direct or indirect second tier spend. 3. Utilize Commodity/Procurement Managers and their teams as champions. Let these additional staff assist in the identification of receptive prime suppliers. 4. Define goals Customer goals Reach for maximum participation during a phased in approach Phase in, implementation, education and training with prime/first t tier suppliers and internal staff Train supplier personnel and internal reports that identify progress ress and a format for continuous improvement. Share the goals established for the supplier with management, buyers, sourcing managers MWBE product/services goals Review list of current MWBE suppliers to determine if a match of capabilities may be possible inside supply chain Refer MWBEs to prime suppliers when possible and/or assist prime suppliers in their identification of MWBE suppliers. If MWBE capabilities/product matches m exist, set quantitative goals based on what is realistic, attainable, and mutually m agreed.

7 Considerations Setting and reporting on goals are important elements in any Second Tier Program. Please remember that numbers alone may not tell the entire story. Ensure that all internal staff understand the commitment to second tier reporting and how it supports Supply Chain goals. Continuously develop the prime suppliers use of MWBEs.. (Consider including it as a requirement in contracts) Establish and develop relationships between prime suppliers and MWBEs. Statistical data should be collected to measure progress towards Tier 2 goals and objectives. Validation of proper records/record-keeping process by an audit process.

8 Evaluation Set reasonable and achievable goals Set up a baseline and measure your progress against the goals Accountability must accompany evaluation to achieve your goals. Program accuracy and verification are key. Constant monitoring and communication to participants makes for a successful program.

9 Secrets to Sustainability HOT Tips H Use a holistic approach Analyze and evaluate your Second Tier Program constantly. Its all about accountability. Insure that your Second Tier Program is supported by your company. You need dedicated resources. Demonstrate awareness. Benchmarking works. Constant communications with Prime Suppliers and MWBEs Continuously improve your policies and procedures.

10 O - Opportunities Know your prime supplier base Develop relationships Network primes with MWBEs Monitor your prime supplier reports Know your MWBEs Develop relationships, understand their needs Utilize NMSDC Affiliates, WBENC Affiliates, SBA Maximize opportunities throughout Supply Chain

11 T Teamwork Understand your company s s yearly Procurement Plan. Network your MBEs with all levels of Supply Chain/Procurement. Train Supply Chain staff regarding GSA/SBA Continually focus on requirements and regulations. Recognize and reward your team.