DTE’s Supply Chain is a vital part of our commitment to provide safe and reliable energy for our customers. Our supply chain team specializes in ensuring suppliers operate safely, ethically and efficiently. We are a leader in local and diverse spending, using our procurement dollars to support innovative programs that provide growth opportunities for businesses located within Michigan and those owned by minorities, women, veterans and members of the LGBT community.
DTE’s Supply Chain includes products and services to support operations, fuel supply (including natural gas and nuclear) and purchase power.
In 2020 Supply Chain spent $3.39 billion with 4,158 suppliers located in 47 states. The breakdown of our purchases by business unit is below:
The vast majority of the items purchased by DTE are services organized into more than 25 areas. A complete list of buying categories is available on our web site.
- Invested $2.2 billion with Michigan businesses, creating and sustaining more than 10,400 jobs and exceeding our local spending targets by $200 million.
- During the first six weeks of our pandemic response alone, we spent $15.3 million with local and diverse suppliers.
We believe we’re at our best when our supply chain reflects the diversity of our customer base. That’s why we seek out small and medium diverse businesses and connect them with new growth opportunities.
New, aggressive spending goals formalized our deepening commitment to support and attract diverse companies. Between 2019 and 2023, we will spend $3.5 billion with diverse suppliers. By year-end 2026, we aspire to achieve $1 billion in annual spending with diverse suppliers, which is about 30 percent of our managed spend.
We are well on our way to achieving those goals, spending more than $744 million (nearly 25 percent of our overall external spend) with businesses owned by minorities, women, veterans and members of the LGBT community in 2020. Our spending with diverse suppliers has increased by nearly 300 percent since 2010.
Our award-winning supplier diversity program benefits our company, our suppliers and the communities we serve.
For our nearly 150 diverse suppliers, DTE’s focus on outreach, mentoring, advocacy, and training means new opportunities to succeed and grow. For us, an inclusive supply base brings innovative ideas that add value, so we can provide exceptional service for our customers. For our communities, supplier diversity creates jobs, expands the economy and builds the capacity for revitalization.
This is why we use outreach, advocacy and training to seek out diverse entrepreneurs and help them grow. These are often small or mid-sized companies that connect with us, or our largest suppliers, through unique outreach opportunities or involvement in supplier advocacy organizations.
An innovative approach
Internally, we’re broadening our participation in conferences, networking, introduction and pitch sessions to help company representatives become familiar with potential diverse suppliers ahead of a formal bid process.
We also updated our contract language to clearly state expectations for support of supplier diversity including clarification that diverse suppliers must be certified by one of the national advocacy organizations.
Our bid inquiry process requires that all bids include at least one diverse supplier and one Michigan supplier.
Externally, our outreach is facilitated by involvement in groups like the Michigan Minority Supplier Development Council and the Great Lakes Women’s Business Council and by supporting unique outreach opportunities, including:
Faith-based Supplier Immersion Day Summits – Since 2015, we have sponsored information and networking meetings at churches located in Grand Rapids and Detroit, Michigan. Small, diverse entrepreneurs get the chance to learn about bid opportunities and network with our buyers and representatives from our largest suppliers. These events have resulted in nearly $13 million in business awarded to diverse-owned enterprises and have opened the door for other contract opportunities.
Michigan Diverse Supplier Showcases — Select small and medium diverse businesses are given the chance to compete for a contract opportunity with DTE. Entrepreneurs are invited to give a presentation to a panel of our buyers and business unit leaders. All presenters receive valuable and immediate feedback on their presentation and business plan. Sourcing decisions are made that day based on the presentations. These events have resulted in more than $1 million in contracts awarded to diverse businesses since 2016.
Because of these efforts, we’ve earned more than 30 supplier diversity industry awards since 2018.
Tier II measurement and focus
We multiply the value of our supplier diversity dollars by encouraging our Tier I suppliers to embrace this same commitment and by measuring their efforts.
Last year, our Tier 1 suppliers spent $192 million with Tier II diverse-owned businesses.
Local spending commitment
We invest nearly five times more with local businesses than we did a decade ago. Today, at least 65 cents of every dollar we spend goes to a Michigan company. Between 2019 and 2023, we’ve committed to spend $10 billion with Michigan suppliers. This focus on local spending allows us to create jobs and expand the statewide economy.
We spent $2.2 billion with Michigan businesses in 2020, creating and sustaining more than 10,400 jobs across our state and exceeding our yearly goal by $200 million.
Our unwavering commitment to improve the state’s economy drove us to deepen our support in 2020. During the initial pandemic response period earlier this year, we invested $16 million on personal protective equipment like masks, gloves and hand sanitizer. The vast majority of those funds – 92 percent – went to local businesses.
One supplier’s story
For Choctaw-Kaul Distribution Company, delivering high-quality customer service at a critical moment benefitted both the company and our community. Choctaw is a Detroit-based, minority-owned DTE supplier of industrial safety equipment and hand and power tools. When the pandemic hit, DTE had an urgent need to locate and purchase masks to keep its employees and the community safe. With Choctaw’s help, the company procured millions of kn95 masks that the DTE Foundation donated to local hospitals, businesses and first responders.
“Once we understood DTE’s goals, we activated our national and international networks, to secure some of the most in-demand products in the world at the time,” said Choctaw-Kaul Executive Vice President David Shall. “Our relationship with DTE has helped us grow and we’re proud that it’s protected the community as well.”
Supplier pre-qualification and risk management
All DTE suppliers must undergo a rigorous pre-qualification process before they begin doing business with us. This ensures we are creating and maintaining a high-quality, cost competitive supply chain we can count on.
The pre-qualification process includes legal, safety and risk management review. The amount of insurance required depends on the risk. We also review two years of financials to determine risk and liability.
Code of conduct
We value the business relationships we have with our suppliers and view them as strategic business partners in our success. Our supplier code of conduct outlines the values and principles that we expect our suppliers to share. In general, suppliers must embrace ethical business practices beyond what is required by law and understand that their actions define their company’s character and ours.
We are in the process of updating our supplier code of conduct, aligning the language with a model developed by The Electric Utility Industry Sustainable Supply Chain Alliance. This effort includes adding language that clarifies our position on diversity, equity, and inclusion and human rights.
The safety of our customers and employees is our first priority and we require our suppliers to embrace the same commitment. Through our supplier safety program, we hold ourselves, and our external partners accountable for prioritizing safety above everything else.
Our supplier safety handbook details each supplier’s responsibility for working safely.
We are committed to working safely alongside our contractors amidst COVID-19. Our COVID-19 Return to Work Contractor Playbook and Supplement outlines contractor requirements for working safely with the right PPE and procedures. Compliance with these standards is enforced by inspections.
At the organizational level, suppliers must submit three years of safety-related data and have a safety training plan and manual in place as part of the pre-qualification process. High risk suppliers must register through Avetta, a software system that allows us to track, maintain and verify supplier safety performance, and understand suppliers’ processes to close gaps in performance.
Supplier Performance Management
DTE is committed to reducing costs and driving continuous improvement by managing, analyzing and measuring supplier performance. This practice, called Supplier Performance Management (SPM), has saved hundreds of millions of dollars over the past several years.
At the foundation of this work is our philosophy that contracts are a company asset which must be managed by strong processes and a workforce with the right skillset.
Our SPM program includes:
- Standardized metrics and 101 scorecards focusing on safety, cost dependability, quality and timing for a critical set of high-risk suppliers.
- Training courses that employees throughout DTE can use to increase their skills in contract administration, structuring and other areas. SPM is defined as a “foundational capability” for DTE employees.
- Periodic executive reviews that include leaders from DTE and supplier companies. These face-to-face meetings are invaluable in addressing gaps to performance and building on strengths.
Fostering a more sustainable supply chain
Because many of the products and services DTE purchases are unique to our industry, we are a charter member of The Electric Utility Industry Sustainable Supply Chain Alliance. Formed more than 10 years ago, the Alliance is a group of electric utilities focused on developing a more environmentally friendly supply chain. The group shares best practices and promotes and develops sustainable solutions for businesses.
The Sustainability Project (TSP) is one of our largest initiatives with the Alliance. TSP is an online assessment which measures our supplier’s environmental sustainability performance. Suppliers identify ways to reduce their energy, water and waste and benchmark, plan and prioritize sustainable business practices. TSP’s mission is to make sustainable best practices easy to access, understand and adopt.
DTE encourages our suppliers to use this resource. In 2020, 102 of our top suppliers took the survey.