UP Doubles Down on Inclusive Procurement

UP Doubles Down on Inclusive Procurement

The Supply Chain team includes, from left, Courtney Coleman, senior director-Supplier Diversity; Randall Lasenburg, manager-Strategic Sourcing; and Andrea Oswald, general director-Procurement Operations.

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Union Pacific has proudly laid claim to many firsts throughout its history. At the top of the list – being the first U.S. railroad to establish a supplier diversity program. Nearly four decades later, UP is reinforcing its commitment to inclusive procurement by aiming to increase its diverse supplier spend by 25% by the end of 2021.

“Although we’ve come a long way since 1982, our ultimate goal is to be best in class,” said Clark Ponthier, senior vice president, Supply Chain. “After reviewing our program, we decided we could do more.”

Each year, UP spends billions of dollars across its network of more than 8,000 suppliers who support the railroad’s operations with fuel, engineering services, construction materials and more. In 2020, UP purchased about $423 million in goods and services from more than 275 diverse suppliers in 35 states.

A diverse supplier is a business that’s at least 51% owned and operated by an individual or group that’s part of an underrepresented or underserved group. Common classifications include minority-, women-, LGBT- and veteran-owned enterprises.

From 2019 to 2020, UP’s diverse supplier spend grew 29% – achieving an additional 25% increase in 2021 would require reinforcements. Supply Chain doubled down, growing the program from one part-time employee to a full-time team, which includes Courtney Coleman, senior director-Supplier Diversity, and Randall Lasenburg, manager-Strategic Sourcing. The team is guided by Andrea Oswald, general director-Procurement Operations.

“Increasing UP’s spend requires both identifying new diverse suppliers and ensuring they’re included in our bid process,” Oswald said. “We’ve been speaking with a lot of potential new suppliers who are willing to go above and beyond to get their foot in the door, it’s really exciting.”

To tap into a new diverse supplier base, the team is expanding its participation from one regional council – the Mountain Plains Minority Diversity Supplier Council – to councils throughout UP’s 23-state footprint. UP also is leveraging benchmarking done by RailMarketplace, a joint program created by North America’s largest railroads to expand its supply chain base, to identify diverse suppliers other railroads do business with.

One of the biggest wins to date – Hightowers Petroleum, a Black-owned business in Ohio taking on UP’s fuel card program. The $50 million annual contract increases the railroad’s spend with Black-owned businesses by tenfold. The new fuel card program, which goes live early August, features new discounts and an easy-to-use phone app.

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