New initiative created opportunities for women-owned, ethnic minority and other socially diverse businesses, as well as environmental and cost benefits
When you’re a 100-year-old, $23bn business, it can be hard to stay agile and open to fresh ideas from new suppliers. The solution found by Cummins, the US-based maker of engines, filtration and power generation, was to introduce a Dragons’ Den-inspired process to ensure it continues to meet its goals for water, waste, energy and recycling, while reaping the benefits of creative thinking.
The Innovations Gateway first began in 2016 to increase opportunities for underrepresented supplier groups, while seeking transformative ideas, specifically to help Cummins reduce its carbon footprint and meet environmental targets.
“Barriers to entry to working with Cummins included minimum thresholds and insurance levels. These were often stifling innovation, especially for smaller companies from diverse backgrounds,” says Denis Ford, international sourcing leader EMEA & APAC at Cummins. “We have seen that diversity works tremendously well within the business in terms of innovation and idea generating, so why not try to replicate that among our suppliers and attract underrepresented groups?”
As architect of the project and leader for EMEA procurement, which is based in the UK, Ford reached out to all the procurement teams to encourage their commitment to diversity of spend. He then ran a six sigma project – a methodology used to eliminate defects in manufacturing – to create a new sustainable process for supply chain and indirect procurement.
“We applied our usual due diligence but not all our normal procurement processes… It was led by procurement teams, but it was also about dipping into different pools of talent, such as environmental teams,” says Ford.
The Innovation Gateway used a problem definition workshop involving attendees from all business units to pinpoint eight ‘problems to solve’. These included identifying technologies that recover and capture energy and water for reuse, and finding solutions for moving waste streams up the hierarchy.
There were more than 80 applications from suppliers. The list was narrowed to 26 businesses, which were invited to the Cummins’ office in Peterborough to pitch. They were given just five minutes, with a further two minutes for questions.
The applicants were filmed during their pitches so others could get a flavour. Twelve were selected for further testing, then five were put through internal and external validation. These included Waterblade, which takes a trickle of water and shapes it into a sheet of water the width of a hand to reduce the flow, and Savortex (see column, left).
“We didn’t want them to just have Cummins as a client, we wanted them to be able to attract other clients and grow their businesses,” explains Ford.
Thanks to the Innovation Gateway, measurable progress has been made against Cummins’s environmental targets for 2020. Furthermore, following its success in the UK, the Gateway is being launched in the US, with a finalist event taking place in Columbus, Indiana, on 8 April.
Savortex success story
One of the finalists in the first iteration of the Innovation Gateway was Syed Ahmed, CEO of Savortex. The company supplies energy-efficient hand dryers, which dry hands in 11 seconds and run on just 550W.
A data option captures real-time energy usage and footfall data, sending real-time alerts to cleaners to clean washrooms based on usage.
“This can transform washroom management and typically further reduces maintenance costs,” says Ahmed.
The dryer is being rolled out across Cummins’s UK sites.
“Savortex is now Minority Supplier Development UK-certified, which will help it attract other business, notably from Cummins’s Tier 2 suppliers,” says Ford. “It can access other markets as a direct result of the testing and validation it went through with the Gateway process.”