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 2022, Supply Chain spent $4.3 billion with 3,987 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 LGBTQ+ community.
2022 local and diverse spending highlights:
- Last year, we invested $2.5 billion with Michigan businesses, creating, and sustaining more than 11,000 jobs in our state.
- In addition to Michigan investment, at the same time, we increased spending with diverse suppliers. In 2022, we spent $895 million with certified diverse suppliers which is nearly 24 percent of our external spend.
Supplier Diversity
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 program
Our award-winning supplier diversity program benefits our company, our suppliers, and the communities we serve.
For our 157 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 244 percent since 2012. 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:
Detroit Economic Growth Corporation’s (DEGC) BuyDetroit program — We participate in events that enable in-person connections between buyers of Detroit’s largest companies and local suppliers looking for new opportunities. We are members of the DEGC Buyers Council and participated in the Detroit Marketplace Live and Passport to Procurement Conference.
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.
Awards
Because of these efforts, we’ve earned more than 54 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 $171 million with Tier II diverse-owned businesses.
Local spending commitment
We invest nearly five times more with local businesses than we did in 2010. Today, at nearly 60 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 and we continue to exceed those goals. This focus on local spending allows us to create jobs and expand the statewide economy.
A suppliers’ story
For The Roy Smith Company, a minority-owned DTE supplier headquartered in Southfield, the long-standing business partnership provides stability during turbulent economic times.
“When times get tough, having a good reliable customer like DTE is critical,” said Vice President Ryan Murphy. “It enables us to keep our staff and continue moving forward so we come out stronger on the other side.”
The company provides industrial gas, welding supplies and chemicals for DTE’s power plants and service centers. Murphy says the successful supplier relationship is built on similar values.
“DTE has such a huge emphasis on supplier diversity, and we feel the same way,” he said. “We like to do business with small, diverse-owned start-ups located in Detroit. We’ve learned from partnering with DTE that giving back and bringing new people into the fold grows a community.”
Karl Johnson, president, and chief financial officer of Diversified Chemical Technologies, also a minority-owned supplier, agrees. The company operates out of a 375,000 square foot building in Detroit, providing maintenance, materials, and operational support at DTE’s power plants.
“DTE has a long-established commitment to making sure their supplier base looks like their customer base,” he said. “We connect with that because our passion is giving back to the community.”
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 Sustainable Supply Chain Alliance. This effort includes adding language that clarifies our position on diversity, equity, inclusion, and human rights.
Supplier safety
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 Quality Management
With market shortages leading to capacity constraints within our supply base, DTE continues to seek out new suppliers to support our massive infrastructure investments. A best-in-class dedicated Supplier Quality Management System organization ensures this expanding supply base delivers high quality products and services.
In 2022, we hired a Supplier Quality Manager and began to improve upon the existing Supplier Quality Management (SQM) Systems to ensure our company and our suppliers continue to deliver high quality goods and services amidst this shifting supply chain landscape. These enhancements to the system will help us achieve a higher level of oversight and accountability particularly among suppliers focused on electric grid upgrades where we are spending billions of dollars.
Last year, we completed 30 quality assessments accounting for nearly $150 million in external spending. We are also deploying new supplier pre-qualification requirements along with a Supplier Quality Manual.
Moving forward, we’re onboarding an experienced Supplier Quality team to increase transparency, drive standardization, and further deepen our commitment to this work.
Supplier Performance Management
Employees across DTE continue to reduce costs and drive continuous improvement by learning how to effectively manage, analyze, and measure 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 more than 100 scorecards focusing on safety, cost dependability, schedule, force for good, and quality for critical, 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.
Understanding our natural gas supply
To enhance transparency and consistency concerning emissions and reporting, DTE is encouraging natural gas suppliers to report on their emissions using the Natural Gas Sustainability Initiative guidelines established by the Edison Electric Institute and American Gas Association.
In 2019, DTE surveyed our natural gas suppliers to review their efforts to monitor and reduce methane emissions. As an active member of the Natural Gas Supplier Collaborative (NGSC), DTE Gas sent a letter to natural gas suppliers and pipelines encouraging them to begin reporting under the newly launched NGSI protocol for reporting methane intensity across the natural gas value chain.
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 Sustainable Supply Chain Alliance. Formed more than 15 years ago, the Alliance is a group of electric utilities and supplier affiliate members focused on developing a more socially conscious and 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 ESG 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 2022, 123 of our top suppliers took the assessment.