Darden has the keys to success in supplier diversity
By Staff -- Purchasing, 11/2/2006 2:00:00 AM
Looking for a company to benchmark against for supplier diversity growth? Look no further than Darden Restaurants of Orlando, Fla. The parent company of Red Lobster, Olive Garden, Bahama Breeze, and Smokey Bones has quadrupled its spending with minority suppliers in five years (1998 to 2003) and increased diverse spending more than 27% between 2005 and 2006. And women-owned business involvement grew by 23% in that same time period.
For all of its efforts in promoting and participating in minority supplier development, Darden has won numerous awards. It was named Corporation of the Year by the Florida Minority Supplier Development Councils in 2001, 2004, and 2005; and Joe Lee, former chairman and CEO of Darden, was name CEO of the Year in 2005 by the same council.
How did Darden do it? Norma Sica, director of supplier diversity, identifies a number of keys to success in managing and growing the company’s successful supplier diversity initiative.
The first is commitment from the top. “The most important key to success is leadership support at all levels of the corporation,” she states. “Our commitment to diversity in general and supplier diversity in specific has been part of our fabric since Bill Darden founded the company. It continues today with current chairman and CEO Clarence Otis.” In fact, 36% of Darden’s board members represent minorities. According to Sica, it is important to make sure that corporate leadership understands the business case and value for diversity as a whole, and then provides the support necessary for the effort. “One reason, obviously, is that the journey requires funding and other forms of support,” she states.
The second key is to help existing minority suppliers expand their opportunities with Darden. “Any time we need new products or services, whether they be menu items or software, we always look to our existing suppliers first to see if they can provide what we need,” she states. For example, when Darden chefs seek new menu items, they work closely with food suppliers. Buyers and culinary experts frequently provide guidance and support to minority suppliers, so that they have the opportunity to bid on Darden’s business. Darden provides additional internal mentoring for its minority suppliers. More specifically, representatives from Darden often provide coaching to minority suppliers in the areas of business plans, marketing plans, cash management, product development, and quality programs.
The third key is to locate new sources of minority suppliers. In fact, the growth in Darden’s minority supplier business has been the result of a combination of increased business with existing minority suppliers as well as business with new suppliers. “If our existing suppliers can’t provide what we need, we begin looking for new suppliers,” she explains.
Finding new qualified minority suppliers is not always easy, though, according to Sica. “It can be a challenge to find new suppliers of diversity who can serve our business and meet our growing needs,” she admits. One way the company has found effective, though, is to participate in trade shows around the country. In addition, the minority supplier councils to which Darden belongs also have data banks of qualified suppliers. “We also work closely with our majority suppliers to see if there are opportunities for joint ventures, where they may be able to bring in minority suppliers to work with them,” she states. In these cases, the majority suppliers can provide guidance to the minority suppliers so that, ultimately, the latter may be able to come in and do business with Darden.
Fourth, Darden continuously assesses its performance. By being active in a number of minority supplier organizations, Sica is able to stay abreast of trends and make sure that Darden continues to lead in this effort. For example, she benchmarks the company’s performance against Best Practices using multi-industry data provided by the Council on Supplier Diversity.
Darden is a member of the NMSDC, the Council on Supplier Diversity, the Women’s Business Enterprise National Council, the MultiCultural Foodservice & Hospitality Alliance, and the Florida Minority Supplier Development Council.
With all of these initiatives, Darden is poised to continue to be able to expand its commitment to minority supplier involvement and development.
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