MBN USA

October 26, 2021

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Honda joined BDR in 2008

“Diversity and inclusion have always been part of Honda’s DNA but with the Honda Partnership Network event, it also has become part of our process and an important part of our efforts to increase inclusion in our purchasing activities.” — Elly Bradford, senior manager

Q: When did your company begin its supplier diversity program?

A: We started our supplier diversity program in 1997, and we are very proud of the work we have done in this area for nearly 25 years.

Q: Can you tell us a bit about your supplier diversity program history?

A: We recognized that to increase diversity and inclusion in our purchasing efforts required not only our own direct supplier relationships, but [also] working with our Tier I suppliers to encourage them to give opportunities to more diverse suppliers.

Based on this direction, one of our greatest successes from our supplier diversity program is what we call the Honda Partnership Network.

We initiated this event six years ago to foster collaboration between our Tier I suppliers and members of the diverse supplier community. Diversity and inclusion have always been part of Honda’s DNA but with the Honda Partnership Network event, it also has become part of our process and an important part of our efforts to increase inclusion in our purchasing activities.

We know this event works because of the success we’ve experienced in each year of this conference. Our achievements include growing the number of diverse suppliers in our supply chain to more than 3,000 and our overall annual diverse spend from $2.25 billion to approximately $3 billion in six years. Since our beginning, Honda has purchased more than $28 billion in goods with minority suppliers.

Additionally, in 2020, Honda was named to the Women’s Business Enterprise National Council annual list of America’s Top Corporations for Women’s Business Enterprises or WBEs, the only national award honoring corporations for world-class supplier diversity programs that reduce barriers and drive growth for women-owned businesses.

Honda has many initiatives to increase its business with WBEs, and we are proud to say that within the last two years, spend with women-owned businesses has increased more than 10%.

Q: Why did your company decide to become a BDR member?

A: We are committed to increasing the diversity of our supplier network, and we knew that joining this exclusive group of companies would offer an opportunity to learn from and benchmark like-minded organizations that have built successful diverse supplier programs. Supporting small businesses and diverse companies is vital to the success of Honda across North America and engaging with the Billion Dollar Roundtable provides us with new and different perspectives that can, ultimately, prepare us to explore new directions in our business.

Q:  Besides having a $1 billion annual spend with diverse suppliers, what does it take to be a BDR company?

A: At the core of Honda’s approach to increasing diversity in our purchasing efforts is our desire to establish long-term relationships with suppliers, based on trust and mutual benefit. This [approach] includes a commitment to providing opportunities, especially to diverse companies. The cornerstone of our relationships with suppliers is open and honest communication, which enables us to work collaboratively to fulfill our company principle of supplying our customers with high-quality, reasonably priced products.

We truly believe our suppliers are an extension of the Honda team.

Q: What are some best practices or lessons learned you can share with companies striving to reach the $1 billion diverse spend mark?

A: One recommendation is to establish a second-tier spend program as part of a proactive strategy to develop and grow business relationships with diverse suppliers. This strategy should be based on the goals of each individual company. One of our primary goals is to ensure that Honda’s supply base reflects the ethnic diversity found in our customer base. Auto sales to multicultural buyers are expected to increase over the next decade from 26% five years ago to a forecast of 33% of the total market during the next few years. That [percentage] means one-third of our total sales as an industry will be to multicultural buyers.

Our second-tier spend program allows Honda to make progress in growing diversity and inclusion in the supply chain. This [commitment] is the reason we ask our Tier I suppliers to set a target and plan to purchase 10% of their goods and services from certified diverse-owned companies. Our goal is to not just achieve a dollar figure, but [also] to build sustainable relationships that will benefit the companies and communities around us.

Q: What advice would you give to corporations that would like to become BDR members?

A: The starting point should be to determine your own goals and make sure your entire organization is aligned around them, starting with your executive leadership. Then, BDR provides an excellent opportunity to benchmark other like-minded companies that have built successful diverse supplier programs.

This research will support your efforts to create a realistic plan, with clear goals and a timeline to measure your success and to make sure you are working toward your objectives.

Q: What advice do you have for minority business enterprises interested in doing business with your company?

A: Honda is regularly approached by suppliers seeking to establish a business relationship. We encourage those pursuing opportunities with Honda to understand our business.

We are a multifaceted company with automotive, powersports, power equipment and airplane manufacturing in North America. We encourage suppliers to have a baseline understanding of our technical requirements and ensure they line up with the capabilities of their companies.

It also is important that you are clear about the product/service you want to supply, the value you will bring to our business and your unique selling proposition, as well as the area of the business you want to support.

Finally, Honda is a company with unique history and corporate culture, so it will be important to learn our values and whether they align with your own company values.

If a supplier has not already done so, we recommend that they become certified by a supplier development council and attend one of the many networking events we host or support throughout the year. To become a diverse supplier candidate to Honda, be sure to register on the Honda portal at www.purchasing.honda.com.

To learn more about Honda’s supplier diversity program, visit purchasing.honda.com/diversity.html.