Martinrea International, Inc. has chosen a decentralized business structure that presents unique challenges for its supplier diversity program. The company is a Tier 1 automotive supplier and also supplies quality metal parts, modules and assemblies to other industries. The company has multiple plants, and each plant is its own profit and loss centre. The plant buyers are responsible for the purchases for their respective plants. This makes establishing a monitored supplier diversity program more challenging for Megan Hunter, Executive Director of Global Purchasing.
Ms. Hunter sees her role as a leader within the company to ensure the plant buyers have a roadmap for achieving supplier diversity. Rather than selecting vendors, she identifies those suppliers that appear to be a good fit for plants either from a technical or geographic perspective. It is up to the buyers to make the final decision whether the supplier is given a procurement contract or not.
Martinrea International has 37 divisions spread across Canada, Mexico, the United States, Europe and Brazil. There are 13 plants in Canada alone. The logical question to ask is: where can Ms. Hunter find diverse suppliers for so many different plants? One of the main sources is the Canadian Aboriginal and Minority Supplier Council (CAMSC) vendor shows. The CAMSC shows enable Hunter and plant buyers to identify potential suppliers located in the appropriate geographic areas. The CAMSC Show offers an opportunity for buyers to personally meet and network with suppliers and begin developing one-on-one relationships that can lead to ongoing working relationships.
This is the same model that is used by the company in other countries. For example, Martinrea takes advantage of networking opportunities by attending vendor shows and workshops held by appropriate councils like the National Minority Supplier Development Council (NMSDC) in the Detroit, Louisville and Chattanooga areas. Company policy requires that any plant buyer or representative able to reach a supplier show within two hours to attend. The supplier shows present the ideal opportunities to find local qualified suppliers.
A Little Help from Our Friends
There are certain qualities that Martinrea looks for in qualified suppliers. Ms. Hunter explains, “We want financially stable companies that have experience in the automotive market. We like a supplier to be a well-established company before we do business with them. We do not have a large internal supplier development group that can actually work to grow a supplier, so we really look for suppliers that already have a strong foothold in the automotive market.”
Finding qualified suppliers is not always easy. There are a lot of suppliers in the service sector, and Martinrea does not spend a lot of money purchasing services like those for marketing and consulting. However, experience has taught Hunter and the plant buyers over time that the best way to find component and tooling suppliers is to network. Attending the council shows has proven to be an important and successful strategy.
She applauds the efforts of automotive OEM’s to create business opportunities in the Tier 1 supply base. One example is the Mentoring Martinrea received from Chrysler. Chrysler has many categories to designate the eligibility of suppliers to sell goods and services, one of which is Meeting diversity spend targets. Initially Martinrea was “red” with Chrysler which could have impacted Chrysler’s sourcing decisions. Ms. Hunter said, “Chrysler was extremely helpful and supportive. The company professionals helped us find certain suppliers for particular goods when we had trouble doing so. They notified us when events we should attend were going to be held. With their help, we went from a red to green supplier for Chrysler within a year and a half.”
The Martinrea supplier diversity program has an internal mentoring process whereby goals are set, and the buyer’s performance to those goals is monitored regularly. Hunter assists buyers with identifying successful and financial viable minority and women suppliers that are a good fit for the organisation. She notes “There is no magic formula. You may not succeed at first, but you have to keep trying. Eventually, success will come.”
Best Fit
Over the last couple of years, Martinrea has seen remarkable growth in its diverse supplier spend. Hunter is quick to give credit to plant personnel and the senior management committed to the initiative. Martinrea’s success is proof that each company must find the formula for achieving supplier diversity that best fits the organisational culture and structure.