Intel aimed to spend $2bn annually with diverse suppliers by 2030, but it has now announced it spent $2.2bn with minority-owned businesses in 2022 thanks to its supplier incentives.
The current spend marks double the spend it had with diverse suppliers in 2019, just one year before it set its 2030 goal.
Intel said it achieved this by establishing proactive partnerships with its largest non-diverse suppliers, which helped bring awareness of the benefits of diversity to its manufacturing suppliers.
Intel added its rapid manufacturing expansion globally gave it the opportunity to bring in “more suppliers than ever before”.
For every new sourcing opportunity, Intel’s procurement teams include at least one diverse-owned company in the bidding process. For larger contracts where there aren’t diverse supplier options at the scale or expertise required, it includes diverse spending expectations in negotiations.
Doing so has led to “greater commitments than expected”, it added. The first general contractor for its processor facility in Ohio committed to 20% diverse spending, exceeding the 10% expectation in its supplier diversity policy.
The company explained it had begun in 2016 by encouraging manufacturing and construction suppliers to develop their own supplier diversity programmes. It asked them to report spending with diverse subcontractors, which Intel incentivised by granting supplier scorecard points – prerequisites for Intel supplier awards.
Spend with diverse subcontractors represented 45% of its total diverse spend in 2022, Intel said.
In 2018, Intel worked with three of its largest suppliers to create the Manufacturing Owners Diversity Working Group, which aims to increase awareness of the benefits of, and opportunities for, diverse suppliers.
Intel added that by working with more diverse suppliers, it had been able to secure greater supply chain resilience. It said that when larger companies had been unable to deliver a “critical component”, it was a women-owned supplier who had filled the gap.
Intel’s corporate vice president of global supply chain operations, Jackie Sturm, explained: “By working with diverse-owned suppliers, we increase our resilience, and generate new value within our global supply chain and the communities in which we operate.
“A diverse and inclusive supply chain also introduces greater competition and helps drive innovation. Diverse-owned suppliers have proven to bring different perspectives and innovative solutions that benefit our customers and stakeholders.”
The company warned last year that the US chip crisis had seen it lose around $1.3bn in first-quarter revenues compared to 2021. It emphasised previously it was building up its semiconductor production capacity.
Its diverse supplier efforts, focused on its semiconductor manufacturers, included two milestones, that of $250m annual spend with US black-owned suppliers, and $800m annual spend with minority-owned suppliers globally.
It said that developing a more inclusive supply chain gave the company the purchasing power to “address social gaps in our pursuit of fair business practices”.
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