DTE’s Supply Chain is a vital part of our commitment to provide safe and reliable energy for our customers. Our supply chain team ensures suppliers operate safely, ethically, and efficiently.
About 85 percent of the items purchased by DTE are services. A complete list of buying categories is available on our web site.
In 2021, Supply Chain spent $3.1 billion with 4,330 suppliers located in 50 states.
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, individuals with disabilities and members of the LGBT community.
2021 local and diverse spending highlights
- Last year, we invested $2.2 billion with Michigan businesses, creating, and sustaining more than 10,000 jobs in our state.
- In addition to Michigan investment, at the same time, we increased spending with diverse suppliers. In 2021, we spent more than $747 million with certified diverse suppliers which is nearly 24 percent of our external spend.
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.
Our award-winning supplier diversity program benefits our company, our suppliers, and the communities we serve.
For our 152 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.
DTE requires that diverse suppliers undergo a review and certification process that ensures the business is minority or diverse owned and operated. This review process is completed by one of several third-party diverse business organizations.
An innovative approach
Our spending with diverse suppliers has increased by nearly 300 percent since 2010. A few years ago, we committed to achieving $1 billion in annual spending with diverse suppliers by year-end 2026.
To get there, 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 added a diverse spending requirement to our supplier terms and conditions. We expect our largest suppliers to dedicate at least 20 percent of their external spending to diverse companies, and we measure those results.
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:
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.
Diverse supplier mentoring program — Our Elevate supplier mentoring program leverages the expertise of our leaders to help select diverse suppliers succeed. During the two-year program, suppliers meet periodically with business unit executives and supply chain professionals to review metrics focused on financial health, customers, and growth opportunities. The goal is to position suppliers to take advantage of additional opportunities – either with DTE or with another corporation – and grow their business.
Because of these efforts, we’ve earned more than 42 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 $145 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.
One supplier’s story
For Detroit-based Williams Electric, a strategic partnership opened the door for new growth opportunities with DTE. Williams is an electrical contractor and certified diverse supplier with eight employees. The company helps DTE improve and maintain the underground electrical system. They work closely with Motor City Electric, a larger DTE supplier. DTE encourages suppliers like Motor City Electric to embrace a commitment to supplier diversity.
“We’ve been in business 16 years, we’re committed to quality, and we work with the trades, so we bring that strength to our projects,” said Williams Electric Owner Rodney Williams. “When it makes sense, Motor City reaches out to us and we bid on projects along with them. It gets us to the table a lot more effectively than if we were just out here trying to bid on projects all on our own.”
The recent contract with DTE has enabled Williams Electric to hire an additional staff member and purchase new equipment. They are also bringing on more temporary skilled labor from the local union hall.
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.
Last year, we updated 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. 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 12 years ago, the Alliance is a group of electric utilities and supplier affiliate members 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 GHG emissions, energy, water and waste usage. The assessment benchmarks, plans and prioritizes sustainable business practices. TSP’s mission is to make sustainable best practices easy to access, understand and adopt. The focus is also on disclosures and working with suppliers to set targets and goals to reduce GHG emissions and measure their progress to reaching their goals. DTE encourages our suppliers to use this resource. In 2021, 112 of our top suppliers took the assessment.