Supply chain responsibility
Our supplier diversity program offers suppliers that would not typically approach HP the opportunity to join our global supply chain. We promote diversity among our suppliers because they bring fresh ideas, offer innovative products and processes, and contribute to the economic strength of their communities.
A diverse supplier base also helps us gain a competitive advantage and supports our global citizenship efforts. In 2009, we estimate that around $10 billion worth of business required HP to demonstrate our supplier diversity efforts.
At the beginning of 2009, we integrated the procurement functions of HP Enterprise Services (formerly EDS) and HP, combining the supplier diversity programs of both. EDS’s small business program has helped HP enhance our work in public sector small business subcontracting. EDS had deep experience in this area, and HP has drawn on that experience to more effectively collaborate with small businesses and deliver substantial results for our government customers.
HP recognizes the influence we have beyond our first-tier suppliers, and we encourage action throughout the supply chain. To understand whether our efforts to promote supplier diversity are creating more diverse sub-tier suppliers, we have collected information about how much our top 100 first-tier suppliers spend with second-tier suppliers. This will help us to understand their supplier diversity initiatives and to encourage cooperation on promoting diverse suppliers. This figure represents a baseline for us to improve on in 2010.
If you are a Prime supplier to HP and we have asked you to participate in our Tier II Supplier Diversity Reporting Initiative, please log in here .
HP broadened our definition of a minority business in 2009. The main category of businesses our supplier diversity program supports are minority-owned, woman-owned, veteran-owned and small businesses. For the first time, we have included lesbian, bisexual, gay and transgender-owned (LBGT-owned) businesses in the definition. Through our new sponsorship of, and collaboration with, the National Gay and Lesbian Chamber of Commerce (NGLCC), we will maintain a pipeline of potential LBGT-owned suppliers. In 2009, we also increased our sponsorship of women-owned businesses.
Attracting minority-owned businesses large enough to supply HP can be difficult, and this is accentuated by our efforts to consolidate our supply chain. However, our mentor-protégé program helps smaller businesses grow and become more effective at bidding for HP contracts and for contracts at other companies.
Global supplier diversity
Supplier diversity is mandatory for fulfilling contracts with the U.S. government and with most U.S. states and municipalities, as well as some U.S. commercial customers. HP has maintained a Corporate Supplier Diversity Program Office for more than 40 years in the United States and belongs to more than 20 supplier diversity organizations in the United States, Canada and Europe.
We continue to expand our supplier diversity program in Canada and Europe, and we are working with governments and others to establish appropriate regional definitions of diversity that reflect local society and culture. In 2009, we continued our financial sponsorship of the Canadian Aboriginal Minority Supplier Council (CAMSC) and UK-based organizations Minority Supplier Development-UK (MSD-UK) and WEConnect UK, a nongovernmental organization that increases opportunities for women-owned businesses to compete in the global value chain. In addition we sponsored and participated in various sourcing events.
In South Africa, our supplier diversity program is part of our strategy to comply with Black Economic Empowerment regulations. Through the HP Business Institute, established in 2008, we make substantial investments in the skills development of black employees as well as new graduates seeking to enter the information and communications technology industry. The institute will train 1,800 people within seven years and will boost HP’s overall investments in broad-based black economic empowerment (B-BBEE) to more than R150m (more than U.S. $21 million). In 2009 HP achieved a Level 2 Contributor status against the South African Department of Trade and Industry’s Codes of Good Practice for B-BBEE. Our certified score of 89.07 percent, externally verified by KPMG, represents HP’s performance against the seven pillars of B-BBEE. This reiterates our commitment to transformation in the IT sector and the broader South African economy.
Additionally, the HP Microenterprise Development Program provides start-up assistance and training in business and IT skills to entrepreneurs and businesses around the world with fewer than five employees. See the Entrepreneurship education section for details.
Connecting diverse suppliers
HP hosts events with local business councils and participates in national events that introduce diverse suppliers to potential customers. In 2009, procurement professionals participated in more than 20 such events in Canada, the UK and the United States.
HP Connect Supplier Diversity Summits are effective forums for minority-owned suppliers to meet HP buyers and other businesses. In 2009 we held a U.S. public sector-focused HP Connect session in Washington, DC. This event brought representatives from 22 prescreened small businesses to HP’s Herndon, Virginia, campus to gain insight into doing business with HP and to meet segment leaders from the HP Enterprise Services organization.
In the United States, we collaborate with SCORE (Service Corps of Retired Executives) to sponsor the multi-city Business Matchmaking Program, which offers small businesses the opportunity to participate in governmental and major corporate procurement opportunities. In 2009, we sponsored and participated in Business Matchmaking sessions in Boston, Chicago, Dallas, New York and San Francisco. Since its inception in 2003, the Business Matchmaking program has enabled more than 75,000 small-business sales appointments resulting in several billion dollars in contracts.
In addition to promoting diversity in our supply chain, we advance diversity among our resellers through mutually beneficial relationships. Through our HP PartnerONE Diversity network, we provided marketing and sales support to more than 100 diverse resellers in 2009. The support comes in the form of marketing subsidies, discounted products and visibility on a diverse reseller locator.
In 2009, our total U.S. spending with small and diverse businesses increased by 7 percent, despite consolidation in our overall supply chain. This is mainly due to our integration of EDS’s spend in our total figure for the first time. However, it also reflects HP’s focus on supplier development. We aim to nurture and grow diverse suppliers even as we reduce our total number of suppliers, so that they continue to be strongly represented in our supply chain.
We again exceeded our targets for total spending with small businesses and woman-owned small businesses.
U.S. supplier diversity purchasing results*, **, *** [U.S.$ millions]
|Total small businesses||$3,510||$3,106||$3,365||$3,691|
|Minority-owned small businesses||$1,150||$670||$842||$807|
|Woman-owned small businesses||$380||$440||$476||$534|
- * All figures are for U.S. purchases from U.S.-based businesses.
- ** Data is for the 12-month period ending September 30 of the year noted.
- *** 2009 data includes HP Enterprise Services (formerly EDS) spending. Data prior to 2009 does not.