Challenge

Like an increasingly large number of companies, T-Mobile sees huge potential benefits from increasing the diversity of its supply base – for two particular reasons:

1. As society becomes more diverse, those companies which do not invest in diversity, equity and inclusion (DEI) initiatives risk being left behind, while those that do can have a positive impact on their customers, suppliers, employees and communities
2. Supplier diversity programmes can increase the supplier pool and create healthy competition, which can lead to better goods and services as diverse suppliers bring unique ideas and innovative ways of working

The telecoms company has had a supplier diversity programme in place since 2011, offering diverse suppliers support such as reduced payment terms, with significant success – spend with diverse suppliers rose by over 200% between 2017 and 2020 alone. But it renewed its efforts after its merger with Sprint in 2020, when new CEO Mike Sievert placed diversity, equity and inclusion – including supplier diversity – at the heart of the combined business’s strategy with T-Mobile’s Equity In Action Plan. Reflecting that, T-Mobile’s procurement team has since implemented new initiatives, with a focus on providing additional support for diverse suppliers, incentivising internal staff and encouraging diverse hiring practices in its wider supply base.

Approach

T-Mobile’s supplier diversity team works across all three of the company’s category teams (Network Infrastructure, Technology and Enterprise Procurement, and Supply Chain) to deliver its initiatives. It is led by a Supplier Diversity Director, who reports to the Vice President of Technology and Enterprise Procurement, who in turn reports to the Chief Procurement Officer (CPO). The CPO is responsible for setting function-wide supplier diversity targets, which all procurement teams are expected to support. The supplier diversity team has been grown from just one person to four since 2019. Members were selected based on their passion for supporting DEI and their experience in different business functions, including T-Mobile procurement, legal and the legacy Sprint business. Workloads are divided between the team members according to their experience in particular categories. The team is an active participant in more than 20 diverse supply councils and related organizations, including the Women’s Business Enterprise National Council and the National Minority Supplier Development Council, regularly taking part in panels and events and presenting “How to do business with T-Mobile” sessions to help more diverse suppliers get to grips with its processes. On top of that, a number of recent initiatives pursued include:

• Providing support to diverse suppliers through mentoring and favorable payment terms
• Buyer incentive programme to encourage sourcing staff to work with diverse suppliers
• Investing in training for diverse workers in the supply chain
• Internal communications to promote supplier diversity to procurement teams and the wider enterprise

Providing support to diverse suppliers

As with many smaller companies, diverse-owned businesses can lack the resources and capacity of multi-national corporations and can therefore sometimes struggle to navigate the administration and payment processes that come with supplying a very large enterprise such as T-Mobile. One method T-Mobile has taken to alleviate this burden is reducing payment terms offered to more than 600 qualified small and diverse suppliers to just 30 days after the creation of a purchase order – compared to 90 days for its standard enterprise suppliers. This aims to significantly reduce the pressure on cashflow which small businesses can often experience. The team also offers mentoring to support suppliers in developing their businesses. This comes in two forms:

• Formal: T-Mobile sponsors diverse companies to go through business leadership programmes at two universities – four at the University of Washington and two at Loyola Marymount University, where they can learn fundamental principles of topics such as payroll and HR that they will help them take their business to the next level. Some of these are suppliers introduced to the programme via T-Mobile but others are applicants to the programme that the company has then chosen to sponsor.
• Informal: The team also offers ad hoc advice to suppliers to support them in working with T-Mobile, navigating its processes and getting in contact with the right internal stakeholders

Buyer incentive programme

The supplier diversity team implemented a rewards system for members of the procurement team who provide opportunities for diverse suppliers. When a sourcing manager includes a diverse supplier within an RFP they are asked to complete an entry form, detailing the supplier’s name and sharing a story about how the contract award supports T-Mobile. If the supplier goes on to win the business then the sourcing manager is awarded a ticket for two prize draws:

• Each quarter, four names can be drawn and each winner receives 2,000 points which can be spent on a variety of rewards including gift cards, with an equivalent cash value of $250
• Additionally, each year, everybody who has entered is entered into a further drawing, with one winner receiving 10,000 points – the equivalent of $2,500

Crucially, the reward is for including the supplier in the RFP, rather than awarding them the contract – they are still judged in equal commercial terms against other suppliers on their pricing criteria, capabilities, SLAs and other factors. The programme aims to incentivise sourcing managers to make a more proactive effort to find and consider diverse suppliers who they might have otherwise overlooked. While it required the sign-off of senior leadership, the team found this straightforward to secure given the company’s broader commitment to D&I.

Investing in training for diverse workers in the supply chain

T-Mobile is conscious that racial minorities make up a disproportionately small amount of the telecoms workforce. With massive investment underway to roll out 5G infrastructure, requiring thousands of new technicians, tower crews and commercially-licensed drivers to implement, the company hopes to encourage more men of colour and women into the workforce. While T-Mobile doesn’t employ technicians and drivers itself, in 2021 it launched the NextTech Diversity Programme, which provides a mixture of outreach, training and job placement services to help those from a minority background to find employment within its supply base. The programme is delivered alongside two training partners:

• Learning Alliance Corporation (LAC), which focuses on network technicians and launched in January 2021. T-Mobile has pledged to fund 50 students through this scheme in its first year
• New Reflections Technical Institute, which provides commercial driver training and launched in September 2021. T-Mobile has pledged to fund 20 students through this scheme in its first year

The scheme also invites suppliers are to sign up and pledge funding to support a number of candidates per year, with those who commit to supporting more than 40 awarded the rank of “Visionary”:

• Visionary(40+ students per year)
• Integrator(10-39 students per year)
• Builder (5-9 students per year)
• Connector(1-4 students per year)

The initiative aims to help train and find jobs for hundreds of people, with a target of 90% course completion, 90% of participants graduating within 4-5 weeks; 90% placed within 45 days and 90% retention after 12 months in a job.

Internal communication

The team leverages the support of communications teams across T-Mobile to help raise awareness of supplier diversity among internal teams. These include the CPO’s comms team, the president of technology and enterprise procurement’s comms team and comms teams within the business functions themselves. Through internal newsletters, the team highlights initiatives including:

• The NextTech Programme
• The buyer incentive scheme
• Showcasing diverse suppliers and the contributions they are making to T-Mobile

Outcome

Results

The renewed investment and effort that T-Mobile’s procurement team is making in supplier diversity puts it on track to continue driving improvements in its supply base – both in its own spend with diverse-owned businesses as well as increasing the diversity within its supplier’s workforces, ultimately to the benefit of the economy as a whole. Some particular benefits have included:

• In 2020, the company’s spend with small and diverse suppliers soared to $3.2bn, a huge increase from $2.2bn the year before. It is also in the process of applying to join the Billion Dollar Roundtable, which recognises and celebrates companies that have spent more than $1bn with minority- and women-owned suppliers.
• The NextTech initiative is delivering ahead of target, with 100% of graduates from the first year of the LAC programme graduating and securing employment. Between them, the two programmes Mobile has funded 220 students. Other suppliers including Ericsson, New Tech Construction and Petzel have also joined the program increasing the 220 count to 264.
• Altogether, T-Mobile’s 2021 economic impact report estimates that its engagement with small and diverse businesses has led to over $5.2bn of contributions to the US economy and supports 31,775 jobs through the supply chain
• The discovery of a number of high-performing suppliers, including an LGBT- and woman-owned security business that has exceeded service expectations and a diverse-owned reseller of mobile devices which offers more flexible services than big-name device manufacturers

Next steps

A revised supplier diversity policy and policy statement is in the process of being approved. This will provide clarity and direction for sourcing teams engaging with diverse and small businesses, and explain how they can seek assistance in locating qualified suppliers for their sourcing events. Image: Dmitry Rukhlenko / Shutterstock.com