In the world of railroads, Union Pacific stands as a compelling story of commitment to supplier diversity. Back in 1982, Union Pacific was the first railroad to establish a supplier diversity program, setting the stage for a four-decade journey marked by inclusivity and innovation.
Union Pacific’s dedication to supplier diversity stems from its unwavering commitment to diversity and inclusion. This commitment extends to every facet of its operations, including the selection of its business partners. Why is this passion for diversity so important? Because supplier diversity brings forth a plethora of new products, services, and solutions that might otherwise go unnoticed. It serves as a catalyst for innovation while fostering healthy competition in terms of pricing and services. Furthermore, supplier diversity often translates into investments that spur job creation within local communities where the company operates. In essence, supplier diversity is more than just a business strategy; it’s a force that makes Union Pacific, and by extension the entire nation, stronger.
Initially, Union Pacific’s supplier diversity program focused on engaging with small service vendors, Maintenance Repair Operations (MRO) providers, and administrative suppliers. Over time, the company expanded its horizons by collaborating with various organizations such as the Federation of Women Contractors, Disability:IN, and most recently, the National LGBT Chamber of Commerce (NGLCC). Additionally, Union Pacific leveraged benchmarking through Railmarketplace, a joint initiative among North America’s largest railroads to diversify their supply chain base.
However, identifying diverse suppliers was only the beginning of the journey. Union Pacific understands that nurturing these partnerships and facilitating growth is equally vital. In 2023, the company launched the Strategic Growth Review (SGR) program. The SGR program audits supplier performance and identifies opportunities for growth. This initiative has already conducted reviews with four diverse suppliers: Belger Cartage, Wyatt Resources, Zones, and American Integrated Services (AIS).
Union Pacific’s unwavering dedication to supplier diversity has yielded remarkable results. Since 2017, the company’s diversity spend has more than tripled, reaching a record $813 million in 2022, with the figure continuing to climb. The projected year-end diverse spend accounts for approximately 9.5% of the total supplier spend. This includes nearly 73% spent with women-owned businesses, 10% with African American suppliers, and 5% each with Native American and veteran-owned businesses. Notably, this journey has resulted in cost savings for the railroad, with nearly $30 million saved through competitive bids awarded to diverse suppliers.
In Illinois, Union Pacific’s commitment to diversity is evident in its growing spend with various diverse suppliers, including Trinidad Construction, Emergent Safety Supply, International Filter Manufacturing, and Chuck Strayve Landscaping. The company’s spend in the state exceeded $11 million in 2022 and is projected to surpass $12 million in 2023.
These partnerships are not just a source of pride for Union Pacific; they are a strategic advantage that aligns with the company’s vision of safety, service, and operational excellence. By embracing supplier diversity, Union Pacific continues to pioneer progress and inclusivity in the railroad industry.