CHG Supplier Diversity Program

Presented by your CHG DEI Team:

A Lesson on Supplier Diversity

What is Supplier Diversity?

Supplier Diversity Supplier Diversity is a business strategy to incorporate diverse-owned businesses, suppliers, and vendors into a company’s supply chain and business practices.

A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of an underrepresented category.

Businesses must be third-party certified to be recognized as a diverse supplier for an organization.

History of Supplier Diversity in the US • Firmly rooted in the civil rights movement of the 50s and 60s.

• With the Small Business Act of 1953, Congress established the Small Business Administration to "aid, counsel, assist and protect, the interests of small business concerns” and ensure that small businesses received a fair portion of government contracts.

• Following race riots in Detroit, General Motors (GM) set up what is known as the first supplier diversity programs, setting an example for much of the American auto industry.

• Public Law 95-507 established a program encouraging government contractors to include minority-owned businesses in their supply chain.

• Early movers included IBM, UPS, Coca-Cola, and more.

Types of Supplier Diversity Certifications

• Minority Business Enterprise (MBE) o African American o Hispanic o Native American o Asian (General, South, Pacific)

• Women-Owned Business Enterprise (WBE)

Certifying Organizations:

• LGBTQ-Owned Business (LGBTBE) • Veteran-Owned Small Business (VOSB) • Service-Disabled Veteran-Owned Small Business (SDVOSB) • Disabled-Owned Business (DOBE) • Small Business Enterprise (SBE) • Small Business Development Program 8(a) (SBA) • Small Disadvantaged Business (SDB) • Disadvantaged Business Enterprise (DBE) • Historically Underutilized Business Zone (HUBZone)

Trend Setters • UPS spends $2.6 billion annually doing business with around 6,000 small and diverse suppliers.

• Coca-Cola spends over $800 million annually on diverse suppliers. They formed a supplier-development institute with Georgia State University to provide education on how to start businesses for small and disadvantaged groups.

• Target spends $1.4 billion on goods and services from diverse suppliers.

• McDonald’s spends over 25% on diverse suppliers and looks at how much CHG spends on diverse businesses through their Tier 2 reporting.

Benefits of a Supplier Diversity Program • Creates opportunities for disadvantaged businesses in our communities • Increases brand awareness and customer loyalty • Access to new ideas, talent, and innovation • Improves supplier competition  improves quality and costs • Avenues for partnerships and mentorship programs • Actively join in the fight against minority group discrimination

Obstacles in Supplier Diversity • Finding minority-owned vendors that comply with a buyer’s procurement requirements can be difficult • Minority-owned vendors that produce what is needed are few or hidden • We must validate all supplier diversity certifications • Reporting platforms for customers are all different and not connected

Did You Know . . .

• According to the Annual Business Survey from the United States Census Bureau, there are more than 2.1 million minority- and women-owned businesses with 2+ employees.

• According to the National Association of Women Business Owners (NAWBO), more than 11.6 million U.S. firms are owned by women, which amounts to 39% of all privately held firms. These businesses generate $1.7 trillion in sales per year and employ nearly 9 million people.

• Companies with diverse suppliers show a 133% greater return on procurement investments.

• Organizations that prioritize supplier diversity spend 20% less on their buying operations.

• More than 50% of the working population (142M people) are employed by a small business.

Supplier Diversity at CHG

Supplier Diversity at CHG Supplier Diversity Mission Statement At C.H. Guenther & Son, we actively seek to partner with diverse suppliers who provide high-quality product, value, and availability. We strive to have a supplier base whose diversity is representative of our employees, customers, and communities and to do our part in helping underrepresented businesses thrive.

Supplier Diversity at CHG Our Core Values at CHG are People, Quality, and Growth. We incorporate all 3 of these core values within our Supplier Diversity efforts.

Supplier Diversity at CHG Our Goals . . .

Supplier Diversity at CHG Percentage of Spend 7%

Reached our goal of 4% for FY24!!!

6% 5% 3.86%

4%

5.00%

4.01% 3.55%

Let’s continue at this same pace!

3% 2%

6.00%

1.86%

1% 0%

FY22

FY23

FY24 Q2

FY24 Q3

FY25

The 0.5% increase equaled to $1 million in diversity spend

FY26

Supplier Diversity at CHG Every quarter we report 0% to LGBTQ–Owned Businesses. This is an area of opportunity for us!

Diverse Spend 1% 2% 1%

3% 1% 0% 1%

6%

85%

Women Owned

Veteran-Owned

Hispanic American

Asian Owned

Native American

African American

Small Business

Small Disadvantaged Business

Small Biz Admin

Supplier Diversity at CHG • We have established a Supplier Diversity Sponsorship Program. Any business that we use repeatedly that is underserved and not certified, we will examine the need and usage of their business and qualifications.

• Sponsorship includes paying for their certification fees which average $800 – $1000 • Hope to expand the program to offer more sponsorships in the future • First Sponsorship is

Design and Marketing.

What can I do?

• We look at Direct, Indirect, and P-Card Spend. If you can choose a diverse supplier for any business function, please do so.

• Ask your counties and cities for a list of diverse businesses.

• Ask your suppliers if they are diverse-owned businesses.

• When filling out vendor forms, please make sure to notate what diverse category they are in and get a copy of their certification.

• Send questions to DEI@chg.com!

Our Newly Diverse-Certified, Recommended Design Vendor!