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NYSE: RAI $64.50   +0.18 (0.279%)
Supplier Responsibility

Supplier Diversity

Having a diverse supply chain is critical for continued success. Rapidly changing demographics and societal expectations contribute to an ever-evolving landscape. RAI’s subsidiaries actively recruit and retain diverse suppliers to drive innovation, reduce our supply chain impacts and enhance the communities in which they operate.

Supplier diversity promotes an innovative business environment not only throughout the RAI companies, but also for their diverse business partners. A diverse supplier base has the following benefits:

  • Driving innovation;
  • Competitive edge in a changing business culture;
  • Competition and inclusion in sourcing decisions;
  • Excellence in materials and services;
  • Enhanced quality, service and cost competition; and
  • Social and economic benefits in local communities.

Our operating companies commit to ensuring equal-access business opportunities to qualified, high-potential, diverse suppliers. Procurement works with each of the operating companies to execute supplier diversity goals. We track the following diverse supplier categories:

  • Minority Owned Business;
  • Woman Owned Business;
  • Minority Woman Owned Business;
  • Minority Owned Small Business;
  • Women Owned Small Business;
  • Minority Woman Owned Small Business;
  • Veteran Owned Business;
  • Service Disabled Veteran Owned Business;
  • Disadvantaged or Disabled-Person Owned Business; and
  • HUBZone Business.

Diverse Supplier Spend (Percent)

2012 2013 2014 2015

Performance toward supplier diversity goals is currently tracked using data from suppliers that self-report a diversity status or are third-party certified. Moving forward, we will separately track and report on suppliers with third-party certifications. Near-term, we expect these more stringent requirements to result in lower diversity spend than previous years, however, we aspire to reach an 8 to 10 percent diverse spend rate by 2020. As we make this transition, we will be systematically engaging our non-certified minority suppliers to encourage them to obtain their third-party certification and to ensure we have their latest certification on file. As we complete analysis of our supplier base under these new requirements we will refine our goal.

As our supplier diversity program matures, we will also collect:

  • Small business spend by supplier and in total;
  • Diversity inclusion in Strategic Sourcing Initiatives; and
  • Percent of diverse suppliers in total supply base.

To advance our supplier diversity program, the procurement department maintains relationships with the Women’s Business Enterprise National Council (WBENC), National Minority Supplier Development Council (NMSDC) and Carolinas-Virginia Minority Supplier Development Council (CVMSDC). In 2015, we participated in an offsite business opportunity fair with the NMSDC. We also held an onsite IT Innovation and Business Opportunity Fair, in partnership with the CVMSDC and Institute for Supply Management.

In 2016, the Supplier Diversity Team plans to advance supplier diversity programs through several initiatives, including:

  • Developing a supplier diversity landing page on the RAI website;
  • Promoting and improving third-party certification and validation efforts;
  • Increasing internal engagement throughout RAI and its subsidiaries;
  • Increasing external engagement with suppliers and supply chain groups; and
  • Evaluating supplier tracking and reporting systems.

Read an example of how R.J. Reynolds is engaging a diverse supplier.