Diversification in the Supply Chain for Travel

Business leaders are becoming more aware of the systemic racism in our society and the challenges that racial minorities, LGBTQ+, disabled, and others face. This has inspired them to reconsider their commitment to diversity and inclusion in their supply chain practices, including travel.

According to BTN’s 2020 State of the Industry Report, 32 percent of respondents said that race, equity, and inclusion would influence the design of their programs once the sector emerges from the pandemic-induced shut down.

Rob Brown, Southwest Airlines’ senior director of B2B strategies and services, stated that “we have fielded diversity queries in [requests to proposals] for many years” during the recent BTN Group diversity equity and inclusion-focused virtual conference. He said that the recent conversations had taken on a new tenor. They are not just checking boxes. They’re more durable and can last for a longer time to bring about real change.

Travel and Meetings Society was established early to include diversity and equity. This committee was originally created in response to the Covid-19 crisis. Carol Fergus (Fidelity International Director of Global Travel, Meetings and Ground Transportation) is the co-chair for the TAMS Committee. She also sits on the newly formed DE&I panel of the Global Business Travel Association.

Fergus, in an interview late last year with BTN, a Travel Procurement Portfolio mate, identified diversity sourcing as the key to promoting more diversity within managed travel.

She said, “[You must] question suppliers and examine recruitment and training programs. Look beyond security managers and front desk receptionists and [server at] cafe servers.” You must look at the offices, [at] sales people and executive levels. You can’t say the company is diverse until you see the entire company. She also said that travel buyers have to broaden their purchasing efforts in order to support diversity and include different companies.

She said, “We must take the time and see potential partners to figure out their fit in the mix.” It’s not about giving business to people who fit certain criteria. We need to open the market to others, but also to allow them to be considered. Then we will vet each person on an equal basis with their contributions.

Diversify Your Travel –

A Harvard Business Review June 2020 report stated that diverse supply chains can “broaden potential suppliers” and encourage competition within the supply base. This could improve product quality, and lower costs. According to the report, supply chain diversity gives businesses greater agility and allows them to adapt quickly to changing circumstances.

However, for business travel partners, a lot of the product is not just about what they deliver, but into how service and business travelers are treated when representing their companies away from home.

During the BTN Group’s recent symposium series on DE&I in business travel, a number of businesses travelers who identify as Black, Asian-American, LGBTQ+ or have physical or mental disabilities discussed negative experiences–including a lack of physical access to products and services and concerns about their personal safety–while traveling on business. Black travellers were asked about their seats in premium airline cabins, the access to buffet meals at all-day conference attendees and LGBTQ+ travelers being embarrassed by front-desk staff. It is important to ensure that preferred suppliers are able to provide diversity from all levels. This will help to reduce product and service delivery problems and support travelers who generate revenue and business for their companies.

This is crucial because of the increasing diversity in the workforce. According to BuiltIn, 37% of adults working age will identify as minorities by 2020. This is according to the startup and tech company recruitment specialist BuiltIn. Furthermore, groups that were once considered’minorities” will become majority in the U.S. by 2044, which will have a significant impact on diversity at work.

This is not about giving business to people who fit certain criteria. It’s about opening the search up to others, even if they are not a good fit. Then we vet them according to their contributions.

Discovery’s Anitra Kings

However, companies must now discuss diversity at work and shift their travel buying mindsets in order to attract the best workers while supporting them on the road.

Glassdoor’s 2020 survey found that 76% of job-seekers believe that diversity is important when considering companies or job opportunities. A Facebook post by an LGBTQ+ employee stated that he has been looking at employee handbooks, financial support from religious, political, and other organizations, and how it would affect his daily well-being. This was because his community did not support LGBTQ+ equality. According to Glassdoor, 79 percent of LGBTQ+ job applicants had the same strategies. According to Glassdoor, eighty percent of Black job seekers and Hispanics said that diverse workforces are a key factor in evaluating job opportunities and companies. This is the kind of people and dynamic travel buyers should consider when working with suppliers.

Diversifying Travel Sourcing

Shaka Senghor heads diversity, equality, and inclusion at TMC platform TripActions. In June, he spoke to the BTN Group audience about his company’s diversity culture. It’s really top-down. He said that executive buy-in was crucial and encouraged leaning in. To do a good job at DE&I, make sure people are involved and ensure that the resources are shared equitably, it is important to live close to customers. It is important to live in close proximity to your customers and communities that you are involved with. Services and travel experiences are what we offer. It affects many different users. Each user may experience differently, or even be vulnerable when traveling to unfamiliar places.

Senghor stated that TripActions has recently considered the issue of business travelers having to pay for their business trips. This could be a barrier to some people’s job advancement. This is a problem that TripActions hopes to eliminate.

He said, “The global epidemic really showed a lot to us, and one was that, as a global community we are all in the exact same storm but not all of our boats.”

This is the kind of insight that diversity and different suppliers bring to the table. The travel supplier community is paying attention. Major suppliers such as American Airlines, Delta Air Lines, and JetBlue recently appointed chief diversity officers (or chief ‘peoples’) for their businesses. This is a sign of each company’s dedication to the issue.

Ellen Moens is the senior administrator at Care and said that the presence of such a senior position in administration is one of her criteria for evaluating the intent behind diversity efforts among travel suppliers. Also, she asks for information about training of employees around diversity and inclusion, as well as those with managerial responsibility, and requests that each supplier make “detailed commitments to principles and diversity, inclusion, and community involvement.”

Brown of Southwest said that a lot the conversation with corporate clients about diversity and inclusion centers around this type of cultural alignment. A company might have an idea and a goal that they wish to pursue. They may want to work with an airline, or other travel partners who align with their objectives. This is how to really make a difference and not check boxes.

Frankie Crisostomo, Visa’s corporate travel manager in the Americas, considers the importance of these types of alignments and questions when selecting suppliers. She also examines the supply chain diversity of suppliers–a strategy known as a Tier-two sourcing strategy. She said, “We are committed to a…tier-two initiative in order to improve opportunities for diverse suppliers.” We ask our Tier-two suppliers for metrics about who they collaborate with regarding diverse suppliers.

Many travel suppliers employ supplier diversity strategies. Avis Budget Group belongs to the elite Billion Dollar Roundtable. This group requires that companies spend $1 billion annually with different suppliers in order to be eligible for membership. Rona Fourte, United Airlines’ senior supplier diversity management business manager, acknowledged the value of such supplier vetting to corporate travel buyers. She said that United has diversity language in its contracts with all suppliers. However, United will educate and push critical suppliers to adopt more diverse practices. This includes checking the supply chains of candidates. She said that she walks non-diverse suppliers through the completion of a participation program so they can access flow-down criteria, how they measure their supply chains and other inclusive practices.

More Strategic

Tier-two strategies, which acknowledge diversity within a supply chain partner, are based on the number of diverse certified suppliers. There are 10 types of certifications that can be granted by the United States to minority- and women-owned businesses. This designation allows travel buyers to begin their search for potential suppliers that may meet their needs. ATG and Omega World Travel, two of the most prominent players in corporate travel are both women-owned businesses. However, others, such as Dallas-based Campbell Travel, are veteran-owned but have never applied for certification. Teri Goins, President of Teri Travel said that she’s currently looking into how to be certified.

Anitra King, who directs global supplier performance and innovation–including diverse sourcing innovation–for Discovery also spoke at a recent DE&I conference hosted by the BTN Group. Her emphasis was on the necessity of certification, which she described as “a very important goal for diverse businesses” and as a tool to provide context and authentication for diverse sources. However, her statement said that the special circumstances of different suppliers, which are often smaller and less resourceful, may limit the amount of time needed for certification. King’s innovation strategy for Discovery allows candidates to declare diversity, even if not certified, as part of the wider sourcing network.

We ask prospective suppliers to answer the following question: “Do you consider yourself as varied based upon the U.S.?” ” She said that while the focus of the company is on the U.S., they are also looking into designations for other markets in order to launch similar programs. We want [these companies] encourage them to get in touch with Discovery, even if they don’t currently have certifications. Discovery may be able help, regardless of whether or not it is a time-consuming or financial issue.

King previously purchased travel for Honeywell, Advanced Micro Devices and Advanced Micro Devices. He believes that the collaborative component of Discovery’s Sourcing Program is crucial. It’s more than what the supplier can do to us, it’s also about what we can do to the supplier. The same process applies to all categories, just as we do for travel. “We like to have diverse perspectives at the table… so that we can open up for other life experiences, business experience and ideas.”

Other Ethical Challenges

To be successful, it is essential to get leadership buy-in. To be successful, travel buyers need to look within their companies for diversity leaders. They can offer advice and access to existing procurement and diversity structures. This could help them to motivate other senior executives and move towards incremental improvements in travel sourcing diversity.

Maria Chevalier (predictX vice president for customer success), who was previously responsible for travel at Johnson & Johnson and has been a member of the Billion Dollar Roundtable, admitted that it might be difficult. There’s much to do to make it easier for small and diverse companies to get into the program. She said that they cannot be priced competitively with big-cap firms. These segments have been responsible for economic and job growth in the past several years. This is not just the right thing to be doing, but it also drives economic growth.

The 2016 Annual Survey of Entrepreneurs by the U.S. Census Bureau shows that there are 1.05 Million U.S.-owned businesses and 8.7 Mio. workers. According to the National Minority Supplier Diversity Council, minority-owned businesses are estimated to generate $49 billion annually in economic output and $49 million in tax revenue. Large companies could be motivated to achieve more by being recognized in exclusive membership groups such as the Billion Dollar Roundtable.

Chevalier warned against unethical behavior by companies that seek to achieve diversity metrics status symbols. Chevalier cited, but did not identify, companies that attempted to use all travel spending through TMCs owned by diverse groups as part of the spend with minority and women-owned businesses. Only fees and charges imposed by TMCs would be considered diverse spend. There is a correct and wrong way to get [recognition], and it all starts by looking at the company’s culture and priorities. She advised that if you examine their senior leaders and see they are all the same you will have an answer to your question.

At the BTN Group DE&I Event, diversity sourcing panel members agreed that motivations for diverse spending are shifting.

The spotlight is much more real from my standpoint, having been involved in diversity procurement over the past 25 years. King said that it feels like organizations are getting the message, and want programs to be created for the right reasons. Discovery had diversity procurement as part of its plan for years, but it was only about a year ago that we saw a significant increase in social awareness. “Let’s reinvent this program,” we thought to ourselves. This is not about just collecting spin numbers and data points. This is not the way our executive might want to get certificates. It’s about making a real difference and doing the right work.

Publited at Wed 28 July 2021, 05:07.24 (+0000).

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