MBN USA

July 02, 2024

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Watson: 'Diverse firms much more competitive'

American Honda Motor Co. Inc. recently partnered with the Women’s Business Enterprise National Council Ohio River Valley and Great Lakes Women’s Business Council to host a Women’s Lunch & Learn.

After the event, Daryl Watson, manager, procurement diversity, at American Honda, MBN USA sat down with him for an exclusive interview to discuss his background; Honda’s successful minority business development and supply chain initiatives – including this event; the value of membership in the Billion Dollar Roundtable Inc. (BDR) and other organizations championing diverse supply chains; advice for doing business with Honda; and more.

Q: Can you tell us a bit about your background and your experience?

A: This October will be my 35th year at Honda. I’ve been around for a little bit. I cut my teeth in the supply chain arena. That’s where I started when I was at [The] Ohio State University in the material service area, understanding the overall supply chain – basically, how parts get from point a to point b. I would say a good place for any Honda associate to start is with anything having to do with manufacturing, where you get an understanding of how we accept and ship product as well as our quality expectations.

I did that for about four to five years and then I moved on to logistics, which is another part of the supply chain. There, I learned firsthand how we source our transportation, how to calculate the cost of transportation as well as working with packaging engineers to learn about the packaging side.

Packaging is key. A Class A surface versus a B size surface versus a C surface is extremely important. If you don’t get that right, it doesn’t make it into the vehicle. From there, I jumped into diversity side, where I’ve been for last 10-plus years. The supplier side of the procurement piece of diversity is a passion of mine. I have an opportunity to work with multiple councils in providing opportunity for undeserved areas and undeserved people, including women. We just wrapped up an event aimed at providing education and opportunity for women suppliers in our organization.

Q: How important is supplier diversity to Honda?

A: It’s vital to our inclusion and diversity efforts. A lot of times people look at gender and racial diversity, but we also look at the thought process that goes along with the diversity. That’s extremely important. The thought process allows us to be competitive.

If we get diverse minds in the room, that provides a lot of opportunity for us in the manufacturing area. I bring something different; you bring something different. We put that together, it could be a beautiful thing.

Q: What types of initiatives have you found to be successful in the work that you’re doing in that space?

A: In this space, it’s networking. You need to have partnerships, like the ones you saw in the room today during today’s event. We had two of our RPO partners, Ohio River Valley as well as Great Lakes. But, more importantly, we also had Pamela Prince-Eason, president and CEO of the Women’s Business Enterprise National Council.

Without those partnerships, without those collaborations, it would be very difficult for us to find capable, scalable suppliers. That means, we would have to go out and do it on our own, where, instead, we can go to certain councils or conferences, and we have an opportunity to speak to several thousands of women in diverse companies. So, it’s extremely imperative, it’s extremely successful and it’s extremely important for our future success.

I also want to talk about an entity that doesn’t get brought up a lot and it should be. It’s the Billion Dollar Roundtable (BDR), an organization consisting of companies that annually spend over a $1 billion with diverse suppliers.

Honda has been privileged enough to be a part of the BDR since 2008.

And one thing that allows us to do is sharpen our skills. It allows us to sit next to other corporations and sharing best practices.

We can glean from those best practices. BDR is a very privileged group. We’re extremely excited to be a part of it; iron sharpens iron.

And now that tech companies are coming aboard [to BDR], we’re starting to learn things outside of the automotive realm, which has been very beneficial.

Q: Why do you think BDR – which started with 10 companies, now has 39 members and more expected to join this year – has been so successful?

A: I think companies are truly realizing that it’s the right thing to do.

Diverse companies are just that much more competitive in my opinion. When they look at that from an HR [human resources] standpoint and then they carry that over externally, it’s like, well, why wouldn’t we want to do business with diverse companies?

Q: What are the challenges for the continued growth of supply diversity?

A: We’re in a rare climate these days. After 50 years of continued growth and good works, there are challenges supply diversity is facing. Tech, for example is moving fast. Some smaller companies struggle in this area. They need a longer growth pattern to mature their processes. When technology is changing every day, it’s costly; that’s an expense that they don’t want to bear.

Q: What are some best practices you would you recommend to your fellow supply diversity professionals?

A: In this area, it’s key to establish repeatable processes. That’s No. 1; 1A is you have to have top-down support as a best practice. Lastly, develop a strong Tier II program. We have a lot more Tier I suppliers that can reach a lot more Tier II and Tier lll suppliers.

Q: Based on your experience in the supply diversity arena, where do you see supply diversity and supply chains of the future?

A: My personal experience is spending time at the conferences. I see diverse suppliers in all areas now.

Some eight to 10 years ago, it was fairly segmented. But now you’re seeing companies – small, medium and large – of all ethnic and diverse groups; they’re in all different spaces, which is nice. Some spaces are heavier than others but with advanced technology, you’re starting to see that space grow. Some companies have had to pivot per se, and I’ve seen that pivot.

Q: What advice do you have for new supplies trying to do business with Honda?

A: The first thing is to do your homework. Understand what you bring to that company. Do your due diligence. Go out and research. When you come in, at least understand what models we develop. How does your business fit our business? Too often, suppliers come in saying ‘I just want I just want to do some business with it.’ That doesn’t work! Do your homework; understand our philosophies. Do philosophies match your philosophies?

Understand from a standpoint of your scale. For example, you can bring two trucks to the party, but more than likely, if we have a 1million parts per day sitting on the floor, two trucks are not going to be enough. So do your due diligence!