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Chicago MBOC News
 HSBC’s Ethical Procurement
By Dave Thomas
HSBC is widely known as the world’s largest banking group and one of the largest corporations of any kind. Last year, Phil Yee, Director of Corporate Purchasing was recognized by the Chicago Minority Supplier Development Council (CMSDC) as its “Outstanding Buyer of the Year”, and since then the company’s commitment to supplier diversity has continued to grow.
Last year CMSDC was invited to participate in an event at HSBC’s office in Mettawa, Illinois. The event was designed to be a showcase of their diverse vendors for buyers and decision makers throughout the organization. This was a brilliant idea and an excellent way to demonstrate their commitment to supplier diversity.
“The Supplier Diversity Policy is designed to provide access and opportunity to certified and competitively positioned diverse vendors to participate in the purchasing process based on the guidelines of the HSBC – North America Vendor Management Policy & Procedure” says HSBC Senior Purchasing Manager, Jennice Samuels. “The policy covers the evaluation and reporting of both direct and indirect spends, and Tier I and Tier II diverse vendor spend.”
HSBC Purchasing is a functional organization operating within HSBC Technology & Services North America (“HTSN”) for the purpose of adding value and managing risk of the purchasing activities for HSBC Group in the United States. HSBC Purchasing provides procurement support to HSBC Group members for the acquisition of goods and services, including outsourced services.
HSBC’s supplier diversity program is but one component of the banking giant’s comprehensive business process called “Ethical Purchasing.” According to Samuels, who heads up the Ethical Purchasing Team at HSBC, “Ethical Purchasing is the common thought or practice of procuring all goods and services necessary to operate and support the needs of the organization while minimizing the reputational risk associated with potential negative perception in a socially responsible manner. HSBC Purchasing is inherently dedicated to engage, leverage and manage sustainable sources at appropriate levels of the supply chain that share our corporate vision and commitment to the critical elements of ethical purchasing which include, but are not limited to, supplier inclusion, the environment, social considerations, and energy and waste control. HSBC - North America is stronger because of the differences that make us unique. Our diverse backgrounds, experiences and perspectives all contribute to the creativity, productivity and performance that make HSBC successful. We recognize that leveraging that message and culture over to vendor management will only enhance our Brand and strengthen our position as the ‘world’s local bank’.”
The company is committed to developing relationships with diverse suppliers who have a proven track record of delivering on agreed upon contract SLA’s. One particular MBE who has benefited from this relationship development has been Vmark, a Downers Grove, Illinois based direct marketing company that currently manufacturers credit cards and does commercial printing for HSBC. HSBC’s Salinas, California office, lead by Phil Yee and his team has a business sense for recognizing business talent that fits these criteria. Phil and his team recognized this talent in Vmark and again, as with other vendors, measured these qualities and matched them with the organizations needs.
“The major inspiration behind the level of commercial success between HSBC and Vmark is truly a testament to HSBC’s commitment to minority supplier development and our professionals who support these initiatives,” said Samuels. “Under the leadership of Phil, this vendor has been able to grow within the supply chain as a result of their delivery, quality and ability to meet the HSBC cost model for products and services in this commodity.”
For Vmark, being a supplier to HSBC has meant more than just getting a contract. “HSBC's initiatives and efforts in being FSC and environmentally friendly have had impact on Vmark as well,” said Vmark business development manger, Stephen Vasanth. “As a strategic partner, we consider HSBC to be the global leader among our client base for these outstanding efforts. In our development with them we were made more aware of the sense of urgency for these global goals. The wonderful educational events we attended that were sponsored by HSBC Procurement also influenced our knowledge and understanding of their environmental efforts.”
HSBC’s commitment to supplier diversity and development are befitting of a world-class organization. It is not simply enough for a supplier to gain a contract from them, but instead it is of mutual benefit that both the supplier and the organization are made better from the experience.
Minority Businesses: The Great Untapped Resource for… Minority Business Opportunities
By Dave Thomas
If you’re a minority business owner you’ve no doubt attended one of the vast number of “business opportunity fairs” or procurement “lunch-n-learns” or social functions, all geared to put you in touch with corporate reps who may or may not be the gatekeepers to those business opportunities that you covet. But more times than you may realize you’re completely ignoring business opportunities that could be standing right in front of you: other minority business owners.
I’ve spent more time than I care to think about, standing in booths talking to MBEs who offer perfectly good products or services that unfortunately, not enough corporations want or need. I mean really, how often do you think the buyers at your average Fortune 500 company are going, “Boy, if only someone would come along and sell us office furniture…” By the same token, I’ve visited the offices of numerous MBEs and the first thing that comes to mind is, “Boy, these guys could sure use some office furniture.”
What I’m talking about of course are MBE-to-MBE business opportunities. Recently, I had a discussion with an MBE ornamental steel erector who had an enormous opportunity to go after a contract that called for the installation of a variety of steel components on a construction site. The problem was that the vendor who he tried to get those components from could not meet his schedule or pricing. Rather than have him back out of that opportunity altogether, I asked him to visit the plant of an MBE steel fabricator that I was familiar with. What he found was not just a vendor who could deliver the pricing and scheduling he needed, but could also deliver quality and a level of personal attention that he had never gotten from his previous vendor. By the time these two businesses were done talking, they had agreed to what they said would be a “long-term” business relationship that could result in millions of dollars of business between each other.
This kind of thing should be happening with increased regularity as hopefully more and more MBE business owners begin to realize that the stranger sitting next to them at a luncheon or awards dinner could easily become a valued customer or client. This could be particularly true of the IT and construction industries, where capacity is always a key factor in a company’s ability to win large contracts.
Some of the largest IT contracts are coming from the federal government, particularly from the United States Air Force’s NETCENTS II program where more than $10 billion dollars in contracts are being awarded to IT companies. George Mui, Global Business Consultant for the Minority Business Development Agency (MBDA) in Chicago has been working with MBE IT firms to encourage them to form joint ventures and strategic alliances in order to enhance their ability to gain some of these contracts. MBDA has hosted a number of MBE IT events geared toward bringing a variety of companies together to keep them informed of opportunities and help build business coalitions. Some businesses have even used these events to find other MBEs who they can partner with to go after other large contracts as well.
And capacity is even more of an issue in the construction industry where often times contractors are asked to finance the costs of large multi-million dollar projects up front and receive payment from their client after project completion. Few MBEs alone have the financial capacity to provide such services. But think what a strong MBE contractor who partners with the right MBE financial investor can do.
So the next time you find yourself at a business fair or golf outing or whatever the next networking event is, get your money’s worth by getting to know some of your fellow MBEs. You never can tell where your next big contract might come from.
Ernest Edwards, President, U.S. Architectural Glass & Metal
Anyone who believes the old saying that “nice guys finish last,” has never met Ernest Edwards. He’s a graduate of Governor State University (B.A. Business Administration) and a resident of Naperville, Illinois where he lives with his wife, Leslie, and their four children, Ernest Jr. 15, Alexander 13, Leslie 18, and Jada 4. During the past year he has been able to expand his business both organically and through business acquisition despite one of the country’s roughest economic periods. He has now positioned himself to be one of the most successful business people in the Chicagoland area, while still managing to be one of the most humble and down-to-earth people you can meet.
Ernest started his career in the glass industry in 1986 as an employee of Globe Glass and Mirror of Chicago, IL. At Globe, Ernest played an integral part in helping to build USA Glass Network (a national network that consisted of 4500 independent and company owned glass shops). As the Network Relations Manager, Ernest was the key liaison between the Glass Shops and national clients. During Ernest’s tenure, USA Glass Network grew to gross over $300 million in annual sales.
In 1993, Ernest was recruited by a group of independent glass shops to serve as the Director of Operations of National Glass Cooperative of Buffalo Grove, IL. As the Director of Operations, he was responsible for managing the day-to-day operations of the cooperative including all short term and long term planning decisions.
In 1996, Ernest left the glass industry and worked for Qualex Inc. a division of Eastman Kodak in Durham, NC. As the Technical Support Manager, Ernest and his team supported approximately 5,000 photo development kiosks, that were installed and operating at major retailers (Walgreens, CVS, etc.) throughout the United States.
In 1999, Ernest accepted a position with Allstate Insurance Company as its Senior Division Manager for its Direct Response Unit in South Barrington, IL. This position required Ernest to relocate his family back to the Chicago area where his family and business ties are entrenched in the community.
During his tenure at Allstate, Ernest was a part of the original management team that opened a pilot 200 employee Licensed Agent facility in Vernon Hills, IL.
In the latter part of 2000, Ernest Edwards bought the franchise rights to a nationwide glass franchise. As the sole owner of his franchise, in a short period of time, he was able to make a huge impact in his market area. The first full year of gross sales ($700,000) far exceeded all expectations. Ernest was responsible for all sales and marketing, estimating of construction projects, and day-to-day operations (banking, accounting, service and installation).
As a full service glass company, Ernest’s franchise did Auto, Home and Business glass repair and replacement. The business has experienced a great deal of success with commercial accounts and general contractors (servicing accounts such as Sears, Footlocker, Gap Stores, Cook County Government and many others).
Because of the tremendous growth opportunity in contract glazing and a reduction in residential opportunities (due to the economy), in 2002 Ernest decided to focus the company’s efforts solely on commercial projects, thus starting U.S. Architectural Glass & Metal.
Today U.S. Architectural Glass & Metal is a very successful union contract glazing and miscellaneous metal contractor. Customers include some of the largest contractors in the Chicagoland area such as W.E. O’Neil, F.H. Paschen, Kiewit-Western, McHugh Construction and many others. Among his most notable projects are the decorative steel railing along the Michigan Avenue Bridge on Chicago’s illustrious “Magnificent Mile,” a massive glass installation project at the Art Institute of Chicago’s beautiful new “Modern Wing,” and the Chicago Transit Authority’s Red Line Rehabilitation project.
The company has seen tremendous growth over the years and recently acquired Glass & Mirror America of Westmont to pursue new opportunities in the residential, auto and light commercial repair and replacement glass market. U.S. Glass Magazine’s, March 2008 edition, listed U.S. Architectural Glass & Metal as one of the largest Minority Owned Glass and Metal Contractors in the United States of America.
But Ernest isn’t threw growing his business, not by a long shot. He already has an eye toward the next level that he wants to take his business to. Ernest was part of a contingent of minority business owners who traveled to China with the Minority Business Development Agency. On that trip he met with Chinese business owners who he feels could be key to expanding his business even further.
Even with the current downturn in the economy, Ernest Edwards is proof positive that the economy and particularly minority business could be on the verge of a serious breakthrough. If so, you can bet that companies like U.S. Architectural Glass & Metal will be right in the middle of it. |
