The Strategic Advantage of a Diverse Supply Chain

Over the past 20 years, supply chain diversity has evolved from a compliance-driven initiative to a strategic imperative and competitive advantage that just makes good business sense — for us and for our customers.

A recent McKinsey & Company article reported that minority- and women-owned business enterprises (MWBE) “offer their corporate partners year-over-year cost savings of 8.5 percent, considerably more than the 3 to 7 percent annual procurement savings that most organizations realize.”

The Maintenance and Construction (DZMC) business unit has seen firsthand the cost savings and overall positive impact supplier diversity can offer. During the pandemic, we were able to secure an ample supply of PPE for our frontline workers within days — and under market price — thanks to our diversified supply chain. In fact, 75 percent of our PPE was procured from diverse suppliers. 

Our customers recognize the business benefits, too – for at least six consecutive years, Duke Energy has spent more than $1 billion with diverse businesses, and Southern Company established a goal to increase the use of minority-owned businesses to 30% of total spend across all of its subsidiaries.

DZMC continues to make strides to diversify our supply chain and partnerships. In the Government market, we recently partnered with Catawba Engineering and Environmental Services (CE&ES) to form Catawba D&Z LLC, a joint venture under the Small Business Administration’s 8(a) Mentor-Protégé Program, which helps eligible minority-owned, small businesses gain capacity and win government contracts through partnerships with more experienced companies. We are honored that CE&ES recognizes that DZMC’s technical and skilled-labor expertise and depth of experience makes for valuable mentorship.  

We will be participating in an enterprise-wide, cross functional Supplier Diversity Council to support Operations, Business Development, Proposals, and Supply Chain teams in their efforts to find, qualify, and engage innovative new suppliers to support our and our customers’ goals diversifying our supply chains. We finished 2021 with more than 15 percent of total spend with diverse suppliers, including 7 percent of total dollars spent with veteran-owned suppliers, like Penn Tool, one of our key strategic partners and two-time D&Z Supplier of the Year Award winner. And in the past five years, we’ve increased our spend percentage with MWBEs from 2.6% to more than 8%.

We’re proud of these achievements and honored by the recognition that our results are getting from industry organizations and customers alike. The Tennessee Valley Authority named DZMC its 2022 Prime Supplier of the Year for our team’s outstanding contributions over the year to TVA’s Supplier Diversity Program efforts. And in 2021, we were awarded the EEI Prime Supplier Leadership Award for the impressive strides we’ve made in diverse supplier utilization and development.