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Bringing 'Social Justice' and 'Representation' to Blue Shield of California's Supply Chain

Spending on minority and women-owned businesses grows at nonprofit insurer

When it comes to business-to-business sales, many companies take the approach that bigger is better and go with well-known brands without considering the potential positive impacts of going with small businesses. Blue Shield of California takes a more holistic approach with our supplier diversity program. In addition to quality and affordability, we also factor in diversity, equity, and inclusion, as well as the impacts on our greater community.

Blue Shield often contracts with suppliers for technology, printing, and other products and services to provide our members with good customer service and affordable health care. Our supplier diversity program ensures that we also create opportunities for small, diverse businesses who might not normally get to work with large corporations.

Pradip Khemani headshot
Pradip Khemani

According to Pradip Khemani, vice-president of global business services, Blue Shield brings a social justice and representation strategy to our supply chain. “The human mind has a bias to go with familiar brands, and there’s nothing wrong with that,” he said. “But if we want to have greater impacts on the communities we serve, there has to be a shift in mindset to a strategy of intentionality to always be looking through the diversity lens.”

DiversityInc ranked Blue Shield number one on its top regional companies list in 2020 for diversity, which included a review of our supplier diversity practices. Some of the diverse categories officially certified through state and federal agencies include: minority-owned, women-owned, LGBT-owned, veteran-owned and disabled-owned.

Blaisdell’s is a women-owned business with people of color representing roughly 75% of its employees. They provide Blue Shield with PPE, hand sanitizer, office and janitorial supplies. “Small, local businesses fuel the local economy,” declared Blaisdell’s CEO Margee Witt. “When Blue Shield chooses us over a large corporation, we can provide good jobs with great benefits to our diverse community right here in Oakland. It keeps the flavor of our community alive.

“Additionally, small businesses like Blaisdell’s can struggle with the perception that big corporations need to work only with other big vendors. It’s not the case: We can do it better and in a cost-effective manner.”

Audry deLucia, president of EllaPrint, an LGBT-owned business which makes Blue Shield-branded goods, concurred. “Having a large, corporate client like Blue Shield helps us stabilize our business year after year. We don’t have the marketing dollars to put our brand out there, so having a client like Blue Shield brings us the credibility we need to compete. It’s priceless.”

Faced with the pandemic, small, diverse businesses often need a company like Blue Shield to stay afloat or risk having to shutter their doors. Fong Brothers has done much of Blue Shield’s member printing and mailing for the past 20 years. When Covid hit, Tony Fong was forced to reduce his staff from over 100 to about 60 employees. But Blue Shield has helped Fong Brothers not only stay open, but continue to provide health insurance for some furloughed employees, in hopes that they can return to work when things normalize.

Fong Bros 2
Fong Brothers produced much of Blue Shield of California's printing and mailing.

“Family businesses are barely hanging in there, and the Asian community has been hit especially hard during the pandemic,” said Tony. “Blue Shield is keeping us alive and helping us get through the crisis.”

Blue Shield’s supplier diversity spending grew by 29% from 2019 to 2020. When contracts go out to bid, the program ensures that at least one or two diverse suppliers has the opportunity to be in the mix. Pradip says Blue Shield is doubling down on our commitment with the goal of being number one in the health care industry by 2023. “We’ve moved away from accidental to intentional, and now diversity needs to be baked into our DNA so it’s just automatic.”

Ultimately, it’s not about percentages, but the ripple effect the supplier diversity program has in the communities we serve. “Communities of color and other diverse groups have struggled in the larger economy to grow their companies,” said Pradip. “At the end of the day, their businesses create jobs, wealth, and the social impacts of success.”