Buying local is paying off for Detroit businesses.
The 17 Detroit organizations in the Detroit Economic Growth Corporation’s D2D Buyers Council purchased $926 million in goods and services from other Detroit-based businesses in 2014.
The D2D program connects Detroit-based companies to each other as buyers and suppliers. The Buyers Council is a group of key purchasing organizations that lead the effort. The $926 million in purchases represents a 14.4 percent increase over survey results in 2013.
The increase was generated by in membership in the Buyers Council and increased Detroit sourcing among those members.
“The survey results show that large institutional buyers are recognizing the capabilities and value that Detroit-based businesses offer them,” said Rodrick T. Miller, president and CEO of DEGC. “It also demonstrates the help we are delivering to small businesses in Detroit. The D2D program is identifying new bidding opportunities for them.”
D2D is well on its way. When it launched in 2013 DEGC said if Detroit business bought more from each other they could add 7,700 more jobs and increase their revenue by $2.5 billion over the next ten years, and help rebuild the city’s economy.
At a recent matchmaking event, buying organizations offered 200 bidding opportunities and conducted one-on-one interviews with more than 100 Detroit companies.
D2D also offers capacity-building programs for qualified companies and maintains a database of Detroit-based companies interested in doing business with each other.
The D2D website helps connect Detroit companies with local suppliers who have an understanding of the local market. The connections don’t necessarily stop at the city borders. The website also provides tools for companies, including the Pure Michigan Business Connect database, where suppliers can register to become part of a directory for not only Detroit but also Michigan-based companies, and buyers can search for qualified local suppliers.
Several of D2D’s most successful initiatives have been PROS sessions that match contractors with subcontractors in the construction industry, and 19 percent, or $177 million of the overall total purchases in 2014 went to Detroit-based construction companies.
“Construction projects often create jobs for Detroiters,” said Brian Watkins, program manager of D2D. “An increase in spending there is also a sign of Detroit’s overall recovery, and evidence that our program is helping it.”
DTE Energy was one of the companies that did a significant amount of construction work using Detroit contractors.
“We have been pleased with the capabilities shown by Detroit’s construction companies, and our purchases reflect that,” said Anthony Tomczak, chief procurement officer at DTE Energy. “We are also mindful of the fact that when we spend locally we further DTE’s purpose to be an engine of progress and help to create jobs in the communities we serve, and we are proud of that.”
D2D is funded by the New Economy Initiative.