With an integrated network of over 1,300 locations across the United States, Canada, Europe, Australia and New Zealand, United Rentals is the largest equipment rental company in the world, serving construction and industrial customers, utilities, municipalities, homeowners and more. For a large multinational organization like this one, procurement is a complex operation. “Large enterprises face a unique challenge in ensuring operational needs are met across a broad footprint of locations,” says T.J. Mahoney, vice president, supply chain at United Rentals. Managing tail spend—the approximately 80% of total transactions that account for 20% of spend volume—is a high priority, “particularly while ensuring each of our locations has the autonomy to be successful, allowing employees to purchase noncontracted items as needed, within certain parameters established by the organization,” Mahoney says.
In an effort to organize and centralize spending, and add consistency, balance and uniformity to tail-spend procurement, United Rentals decided it needed an upgrade to its technical capabilities, and turned to Amazon Business in 2020.
Mahoney believes the impact has been exactly what the company hoped. “With the help of technology, we’re able to set policies, designate certain products and suppliers as preferred and restrict certain items. It has helped us consolidate our supplier base and increase our purchasing power, improving access to services while maintaining quality control,” he says. “Amazon Business empowers employees to make decisions that best support their unique requirements while providing our central sourcing team the ability to set policies that ensure organizational objectives are met.”
Mahoney says that, at United Rentals, one of the most important of those organizational objectives is supplier diversity. This, the company stated in its 2021 Corporate Responsibility Report, includes “businesses owned and operated by women, minorities and historically disadvantaged groups.” Not only do initiatives around supplier diversity help United Rentals better reflect and support the communities in which it operates; but a more robust and diverse supply chain also helps make the company less prone to shocks and disruptions.
If United Rentals sets that goal for its employees, Mahoney notes, it must also provide the resources. The same technology supporting more business analytics and visibility around tail spend or broad cost management also helps the company understand where it can make improvements around supplier diversity. Dashboard metrics, for example, track the types of businesses supported and their certifications—information critical for purchasing practices in a company as large as United Rentals.
“Amazon Business is a simple way for our employees to shop for items with clear visibility into options from diverse and small companies. The technology empowers individuals to quickly identify certified suppliers,” he says. “We have found that, when we provide our employees with the ability to make an educated decision about where they purchase, they actively choose to do business with small and diverse-owned companies. It’s not just important to our organization, but also to our customers and employees.”
For a company with the scale of United Rentals, even small changes in buying policy can have a meaningful impact. So while the integration with Amazon Business around supplier diversity has only been active since the middle of 2021, Mahoney says the implementation of those tools has facilitated rapid gains. “Before, we were averaging roughly 4% of our total spend on Amazon Business with diverse suppliers,” he says. “Now in some months we are over 17%, and continuing to trend upwards.” It is a catalyst for improved spending with diverse businesses throughout the company, which United Rentals says has more than doubled since 2019, climbing over $1 billion and representing nearly 20% of overall spend.
"Amazon Business is a simple way for our employees to shop for items with clear visibility into options from diverse and small companies. It’s not just important to our organization, but also to our customers and employees."
— T.J. Mahoney | Vice President, Supply Chain, United Rentals
Given the importance of supplier diversity as a core initiative at United Rentals, the convenience and efficiency of Amazon Business to simultaneously meet immediate needs while adhering to the larger company vision has been well received. “The response has been great. United Rentals has an inclusive culture, and people want to support the communities we live and work in. This removes traditional barriers to conducting business with diverse suppliers,” Mahoney says. “One manager expressed that, in using Amazon Business, he is able to not only identify diverse suppliers but also have oversight into what purchases are being made by employees dispersed around the country.”
Mahoney believes the partnership will only grow stronger over time, as more employees understand the capabilities it provides. “As use of Amazon Business grows, for example, we expect employees who traditionally purchased noncontracted items at big-box stores will now be able to make more educated and informed decisions about which communities their purchases support,” he says. “They’ll be able to quickly and easily see a variety of products supplied by a range of vendor categories, at varying quality and price points to best meet their needs.”
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