Union Pacific Railroad considers diversity and inclusion (D&I) foundational to its activities but especially business buying. In fact, Union Pacific was the first major railroad to start a supplier diversity program 40 years ago.
As Union Pacific worked to strengthen its commitment to supplier diversity, it found manual purchasing methods and legacy procurement technology were holding back its ability to meet D&I goals.
By adopting Amazon Business for its digital procurement, Union Pacific is quickly making strides identifying and investing in a swath of diverse suppliers. The partnership is helping Union Pacific meet its supplier diversity goals and achieve efficiencies in purchasing.
Clear goals guide supplier diversification
Union Pacific’s D&I strategy is founded on four pillars: people, practices, philanthropy, and procurement. While the company has consistently increased spending with diverse suppliers over the past decades, Union Pacific wanted to do more.
"In 2020, we took a step back and realized we hadn't been devoting as much time and energy to supplier diversity as we could, and we reinvigorated our program," said Andrea Oswald, Union Pacific’s general director of Procurement Operations and Supplier Diversity. "Each pillar of our strategy has targeted goals and focus areas, serving as a roadmap to strengthen supplier diversity."
To better guide its supplier diversity goals, Union Pacific created six key performance indicators (KPIs). The first three — discovery, vetting, and onboarding — aim to increase the pipeline of potential diverse suppliers. The fourth – bid inclusion – measures how many proposals have a bid from a diverse supplier. The final two — award and total spending — measure the total amount of bids and spending that go to diverse suppliers.
Digital procurement helps Union Pacific achieve D&I purchasing goals
Union Pacific's traditional procurement methods, including a legacy catalog system and manual search, made it difficult for employees to order specific items and even more challenging to find diverse vendors who supplied those items.
Union Pacific increased its total spending with diverse suppliers by 23% in 2021 and plans to increase by another 20% in 2022. With the recent Amazon Business partnership, Union Pacific will benefit from the many improvements, including:
Effortless identification: With a $5 billion+ procurement program, finding diverse suppliers for every purchasing opportunity via manual discovery is time-consuming, especially for Union Pacific's specifications on critical equipment, such as rail.
With digital procurement, Union Pacific takes advantage of consumer-like search features to find diverse suppliers with various certifications, such as minority-owned, woman-owned, veteran-owned, and more.
"Having diverse suppliers get bumped up within the search results makes a big impact in our employees’ ability to find and purchase from certified sellers," says Oswald. "Search functionality is one of the features that I’m most excited about."
Streamlined buying: With more than 30,000 employees spread across the U.S., the legacy technology complicated buying processes and created organizational inefficiencies.
"Our legacy stock item catalog isn’t ideal. It’s complicated to use and doesn’t indicate whether a seller is certified," says Oswald. "As a result, we missed out on opportunities to purchase from diverse suppliers."
Because digital procurement channels mimic consumer-facing online shopping channels, employees don’t need much training to start using it.
"With Amazon Business, we give our employees access to something that many of them already know how to use," Oswald says. "Ultimately, digital procurement streamlines processes and helps employees focus on meeting supplier diversity goals."
Increased convenience and reduced risk: Union Pacific’s tracks cover more than 32,000 miles and its employees work in a variety of environments, from frontline workers building and moving trains to those maintaining the railroad’s physical infrastructure and office workers. When materials are needed last-minute, ad hoc supply runs can introduce risk.
With digital procurement, Union Pacific’s employees order essential products from diverse vendors for delivery — anywhere, anytime.
"For a lot of our employees, the most potentially risky thing they do is get in their vehicle to pick up supplies," Oswald said. "The mobile features and easy search functions Amazon Business provides are incredibly valuable and could eliminate the need for store trips."
Union Pacific’s story showcases how digital procurement can help buyers find and spend with women-owned, Black-owned, veteran-owned, LGBTQ+-owned, disability-owned, and other categories of certified suppliers. The consumer-like capabilities and improved visibility ultimately enable businesses to meet internal D&I goals and external federal requirements.
Learn more about Union Pacific’s transformational journey and how your organization can make the shift to digital purchasing by watching our on-demand session from Amazon Business Reshape 2022.
This story was produced by Supply Chain Dive for Amazon Business.
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