American Airlines Supplier Diversity Program
Training
Procurement & Supply Chain Department
Minority/Women Owned Historical Spend Results
($ Millions)
Year over year growth with Minority/Women-owned business
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Supplier Diversity Program
• The program was established in 1989 to facilitate minority suppliers’
efforts in doing business with American Airlines
• American focuses on bringing the added value of diversity to its
procurement process by proactively seeking out minority/womenowned (M/WBE), Lesbian, Gay, Bisexual & Transgender (LGBT),
Veteran/Service Disabled Veteran-owned, diverse and small
businesses through direct relationships with American and indirect
relationships with our prime suppliers and contractors.
• Develops a supply base that reflects our customer base
• Certification is important to the supplier for the following reason:
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Credibility
Networking opportunities
Mentoring opportunities with local councils
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Supplier Diversity Recognition
“Outstanding Leadership and Support
of Women Business Owners”
“Advocate of the Year”
“Best of the Decade” for outstanding
Leadership in Supplier Diversity
“Corporation of the Year”
Recognized for
“Best Practices”
in Supplier
Diversity for
Professional
Services
“Corporation of the Year”
American Confidential & Proprietary
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Supplier Diversity Program
•
American takes a holistic approach to Supplier Diversity
Goal Setting
Memberships
Diversity
Awareness
Supplier
Diversity
Volunteers to
Organizations
Company Advocates
Employee
Diversity
American Confidential & Proprietary -12/20/2013
Networking and
Communications
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Holistic Approach
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Goal Setting
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Memberships
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Departments that purchase products and services have a designated person to report
and support these efforts within their department
Employee Diversity
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American is expecting to participate in over 46 events during 2013
Company Advocates
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Employees from different departments assist with many national, regional and local
committees and events
Networking and Communications
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Membership in 17 organizations (nationally and locally)
Board member of 5 advisory boards
Participate in several industry groups committees concerning “Best Practices” and
benchmarking
Volunteers to organizations
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Tracking progress to ensure achieving the goal
Sharing success stories and being recognized in the community for those efforts
American Diversity Leadership Committee brings strength and broader support to the
organization by sharing information and supporting each other efforts
Diversity Awareness
•
Inclusion of diversified suppliers
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Diversity Qualifications
• 51% owned, controlled and operated by one or more of the following:
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African Americans
Asian Americans
Hispanic Americans
Native Americans
Women
LGBT
Veteran & Service Disabled Veterans
• Principal place of business in the U.S. or U.S. territories
•
American Samoa, Guam, Marianas Islands, Puerto Rico, U.S. Virgin Islands
• Company’s status must be validated by a third-party agency/council or
be certified from a qualified agency, such as:
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Small Business Administration (SBA)
Affiliates of National Minority Supplier Development Council (NMSDC)
Affiliates of the Women’s Business Enterprise National Council (WBENC)
National Gay & Lesbian Chamber of Commerce (NGLCC)
Other city, state and national agencies
•
SBA Self Certification form can be used if the supplier meets the criteria
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Small Business Administration (SBA) Definitions
• As a contractor to the government, American is required to report to
the Small Business Administration spend with a SBA supplier and
include them in the bidding process for contracts over $150,000
•
Certified 8(a) minority-owned (SBA8a)
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HUBZone Small Business (HUBZN)
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A small business concern that is at least 51% owned by one or more veterans. In
addition, one or more veterans must control daily management and business operations.
Service Disabled Veteran-owned Small Business (SDVOSB)
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Historically under utilized business zone – small business in distressed areas
Veteran-owned Small Business (VOSB)
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A firm owned and operated by socially & economically disadvantaged individuals
Must be certified by the SBA as an 8(a) firm
A small business concern that is at least 51% owned by one or more service disable
veterans. In addition, one or more veterans must control daily management and business
operations.
Women-owned Business Enterprise (WBE)
•
Same as minority classification definition
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Small Business Administration (SBA) Definitions
• SBA has several general size standards. A business in one of the
following industry groups is small if it is not greater than the size
standard indicated
Industry Group
Size Standard
Manufacturing
500 employees
Wholesale Trade
100 employees
Agriculture
$750,000
Retail Trade
$6.5 million
General & Heavy Construction (except Dredging)
$31 million
Dredging
$18.5 million
Special Trade Contractors
$13 million
Travel Agencies
$3.5 million (commissions & other income)
Business and Personal Services
Except:
$6.5 million
Architectural, Engineering, Surveying, and Mapping Services
Dry Cleaning and Carpet Cleaning Services
$4.5 million
$4.5 million
• If the size of a business exceeds the size standard for its overall
industry group, it may still be a small business for the specific
NAICS industry in that group. Some industries have higher size
standards than the general one for the industry group. SBA has a
Table of Size Standards on its web site.
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Certifications Examples:
SBA Self Certification Form
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3rd Party Certification
Certificate
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American Supplier Diversity Data Base
• Suppliers register at:
www.aa.com/supplierdiversity
email: supplierdiversity@aa.com
• Once the supplier completes the registration and American receives
their certification, they will receive an email with the name and contact
information of the person within American that handles that particular
product or service
• The designated American person receives an email stating that the
supplier has registered in the database
• To access American database:
http://americanairlines.divtrak.com
Username: diversity
Password: diversity
•
Reports can be run by Linda Misenhimer
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Example of Advocate Email
Dear (Commodity Manager Name),
As our Printing & Graphic Design & Fulfillment Commodity Advocate, this notification is to inform you that the following
supplier has completed their profile and has selected Printing & Graphic Design & Fulfillment as their primary
commodity. Please take a moment to login and review this supplier's profile. They have been provided with your
contact information and may be contacting you shortly to discuss their products or services along with potential bidding
opportunities and the timing of those.
Supplier Name: A&h Lithoprint
Tax ID:362313420
This supplier is classified as a diversity supplier
http://americanairlines.divtrak.com/
If you have any questions, please contact me at SupplierDiversity@aa.com or 817-963-2620.
Sincerely,
Robin Pulford
Mgr. Supplier Diversity
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Other Resources
• Linda Misenhimer can also pull reports from these systems using
different types of information for potential certified suppliers:
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MBISYS database – National Minority Supplier Development Council
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WBENC database – Women Business Enterprise National Council
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Standard Industrial Classification System (SIC) category
National American Industry Classification System (NIACS) codes
Products or Services
• NGLCC database - National Gay & Lesbian Chamber of Commerce
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hhtp://nglcc.cvmsolutions.com
•
Username: AmericanAirlinesTeam
Password: aa100
• The National Center for American Indian Enterprise Development
•
Michael Barber – Director of Procurement
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480-319-4121 – michael.barber@ncaied.org
• Central Contractor Registration (SAM/CCR) database for the U.S.
Government
•
www.ccr.gov
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American Advocates
• Each department with purchasing power is supporting the Corporate
commitment to Supplier Diversity
•
Advocate within the department helps communicate information about the goals,
tools and processes
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They are actively promoting inclusion of diverse suppliers within their department
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Participant in the events and expo’s
•
Point person for their department in Divtrak
• Assist with connecting suppliers to the appropriate buying party
• Additional categories or contact information can be added
•
Reporting M/WBE 1st tier & 2nd tier department spend
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Reporting Diversity Classifications
• Minority Business Enterprise (MBE) – Male/Female
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African American
Hispanic American
Asian American
Native American
• Women Business Enterprise (WBE) – Female non-MBE
• Track Other Classifications – Male/Female and/or M/WBE
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LGBT
Veteran
Service Disabled Veteran
Dallas Together Forum (DTF) & Women’s Business Initiative (WBI)
•
Only if business is located in a 75XXX or 76XXX zip code
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First & Second Tier Spend Reporting
Definitions:
• First Tier/Prime Spend
•
American purchases directly from a certified diversified supplier for products and/or
services
•
Example:
American purchases from a certified diversified drink cup manufacturing company and the
company invoice American directly
• Second Tier Spend
•
American purchases from a first tier/prime supplier that in not a diversified supplier,
who then subcontracts or purchases products and/or services on American’s behalf
•
Example:
Prime Supplier (non-diversified supplier) subcontract bag delivery to our customers with
certified diversified suppliers. Prime Supplier would provided American with the
breakdown of the spend for those suppliers and their classifications (M/WBE)
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Indirect Second Tier Spend Reporting
• Spending by the Prime supplier with MBE and WBE firms in support
of supplier's general business operations that cannot be directly
attributed to support of American Airlines
• Usually large corporations provide 2nd tier spend:
•
IBM, HP, Coca-Cola, Sodexho Magic, LSG Sky Chefs, PepsiCo, Phillips 66, Pratt
& Whitney, FedEx, ExxonMobil, Chevron, BP, Boeing, Airport Terminal Services,
Aetna, RR Donnelley, Sage Parts Plus, Shell Oil, TXU Energy, Airports
•
American provides a template to the Supplier
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Proration Formula
•
Supplier’s American Airlines US spend divided by supplier’s US Sales equals the
percent of supplier sales attributed to American Airlines – American’s indirect
spend equals the supplier’s total MBE/WBE spend multiplied by the percent of
supplier’s sales attributed to American Airlines
Example:
$1,889,325 / $722,196,786 = 0.2616%
Total supplier MBE/WBE $7,781,519 X 0.2616% = $20,356
American indirect spend is $20,356
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Summary
• 2014 Focus
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•
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American will focus on finding opportunities for Veterans and Service Disabled
Veterans owned business
Grow Hub Markets M/WBE suppliers and identify advocates in the region
New Brand awareness
• Why is Supplier Diversity important to American Airlines
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Utilization of certified Small Businesses is required for our U.S. Government
contracts
Continued focus on our Supplier Diversity efforts from our Senior Leadership team
Brand awareness
It’s the right thing to do
• Your support and enthusiasm is critical to our success
Questions?
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