Implementation of Supply Chain Management in Telecom Industry - DOC by oco50772

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									               TELECOM SUPPLIER DIVERSITY TASK FORCE
                           FACT SHEET


Telecom Supplier   The Telecom Supplier Diversity Task Force was created to re-
Diversity Task     energize supplier diversity within supply chains and develop
Force Overview     recommendations on how the telecom industry can work
                   collaboratively to revalidate and revitalize supplier diversity
                   programs.

                   The task force, comprising many of the best minds in telecom
                   procurement and supplier diversity and led by Dr. Alfred E.
                   Osborne Jr., senior associate dean and associate professor of
                   global economic management at the UCLA Anderson Graduate
                   School of Management, analyzed the unique challenges facing
                   the telecom supply chain and addressed how to increase
                   efficiency and cost-effectiveness while using diversity suppliers.

Telecom Supplier   The Telecom Supplier Diversity Task Force issued a study –
Diversity Task     “Revitalizing the Supplier Diversity Value Proposition Through
Force Study        Supply Chain Effectiveness” – that will serve as a resource for
                   the telecom industry, as well as other industries, to effectively
                   integrate diversity suppliers into the supply chain. The report is
                   available at www.SBC.com.

Telecom Supplier   Members of the Telecom Supplier Diversity Task Force include:
Diversity Task         Dr. Alfred E. Osborne Jr., senior associate dean and
Force Members           associate professor of global economic management at
                        the UCLA Anderson Graduate School of Management;
                        chair of the Telecom Supplier Diversity Task Force
                       Susan Bari, president, Women’s Business Enterprise
                        National Council
                       Jo Ann Brumit, president, Karlee
                       Albert Chen, president, Telamon
                       Monica Garcia, former CEO of Complas
                       Joan Kerr, executive director Supplier Diversity, SBC
                        Communications
                       B. Hong Mah, president, LeeMah
                       Jose Mejia, president Supply Chain Networks, Lucent
                       Lynn Mercer, officer Mobility Supply Chain, Lucent
                       Harriet Michel, president, National Minority Supplier
                        Development Council
                       Krish Prabu, partner, Morgenthaler Ventures
                       John Schofield, president, AFC
                       David Steward, president, Worldwide Technologies
                       Steve Welch, senior vice president, SBC Communications

                                    -- more --
Telecom Supplier Diversity Task Force/Page 2


Results/             The Telecom Supplier Diversity Task Force identified five critical
Areas of Focus       focus areas necessary to leverage the participation of diversity
                     suppliers through improved supply chain performance, including:
                            Implement effective sourcing for supplier diversity
                            Enhance risk mitigation activities in supply chain
                             management practices
                            Deploy process quality and control
                            Improve access to capital and financial management
                            Accelerate supplier diversity participation through industry
                             collaboration

Findings/       The study finds that in order for a supply chain to be competitive, it
Recommendations must have the right balance between the need for customization
                and the need for scale. This balance involves successfully
                integrating small businesses into the value-adding supply chains of
                industry dominating larger firms in order to leverage the
                competitive advantage small businesses offer – responsiveness,
                customized services and lower costs.

                     To achieve this balance, the Telecom Supplier Diversity Task
                     Force developed a set of 21 recommendations to improve both
                     supplier diversity and supply chain management. They include:
                         1. Integrate supplier diversity planning into the
                             sourcing process
                         2. Require supplier diversity plan in RFPs
                         3. Require supplier diversity plan in contracts
                         4. Require supplier diversity participation reporting in
                             contracts
                         5. Design and verify diversity business value propositions
                         6. Develop contracts that mitigate risks to small businesses
                         7. Include total cost of ownership and revenue generation
                             benefits when assessing supplier diversity value
                             propositions
                         8. Conduct readiness assessments
                         9. Maintain vendor health check dashboards
                         10. Utilize web-enabled performance tracking
                         11. Promote information systems capabilities for small
                             businesses
                         12. Create cross-functional implementation teams with supplier
                             diversity, OEM and/or service provider
                         13. Implement value added reseller/channel partner best
                             practices to effectively integrate supplier diversity into
                             telecom supply chain
                         14. Develop clear strategies and quality-focused processes for
                             integrating supplier diversity planning into the marketing
                             and sales process
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Telecom Supplier Diversity Task Force/Page 3


Findings/                15. Encourage development of additional sources of short-
Recommendations,             and long-term capital
continued                16. Expand telecom industry university programs to place
                             greater emphasis on financial management capability
                             and working capital planning skills
                         17. Establish web-based supplier diversity resource sites
                         18. Leverage the resources of existing university diversity
                             management training programs to establish joint venture
                             success labs
                         19. Propose telecom supply chain “State of the Union” report
                         20. Standardize supplier diversity participation metrics and
                             reporting methodologies
                         21. Large scale electronic manufacturing service companies
                             (EMS) should adopt the supplier diversity goals and best
                             practices of Telecom industry customers, establish
                             supplier diversity programs and launch initiatives that will
                             integrate supplier diversity into the EMS supply chain as
                             contract manufacturers, value-added resellers, direct
                             suppliers and subcontractors

                     These recommendations are complemented by practical and
                     specific tools and processes, covering topics, such as sourcing,
                     risk mitigation, process quality and control, financial
                     management and collaboration, which can strengthen and
                     balance supply chains in telecom and in other industries as well.

Study                The Telecom Supplier Diversity Task Force spent more than a
Methodology          year conducting more than 60 interviews with suppliers and
                     financial and procurement officers, making site visits and
                     reviewing case studies and best practices.

                     Five basic models of diversity participation in the telecom supply
                     chain were reviewed, including:
                            Subcontractor
                            Contract manufacturer
                            Prime supplier
                            Value-added reseller
                            Channel partner

                                     -- more --
Telecom Supplier Diversity Task Force/Page 4


 Factors Leading to                Due to the economic downturn in the telecom industry, diversity
 Formation of                      suppliers were impacted in a variety of ways, such as:
 Supplier Diversity                      Drop in sales, leaving excess inventory
 Task Force                              No financing for cash flow problems
                                         Inadequate protection in contracts
                                         Ordering/invoicing problems causing late payments
                                         Over committed on “perceived” orders
                                         Large businesses pushed inventory to make
                                          sales objectives
                                         Over dependency on single customer/technology

 SBC Supplier                       SBC Communications has long been committed to supplier
 Diversity Program                 diversity, with a formal supplier diversity program for more than
                                   35 years.
                                          Spent more than $1.7 billion dollars with minority-,
                                           women- and disabled-veteran-owned businesses in
                                           2002, representing 16.6 percent of its procurement base.
                                          SBC Communications was one of the leaders in
                                           developing the telecommunications industry “Supplier
                                           Diversity Challenge” which rallied 14 telecommunications
                                           companies to pledge to do at least 10 percent of their
                                           business with diversity firms. Today, the Challenge has
                                           90 telecom companies signed on to the pledge, resulting
                                           in $8.7 billion in diversity spending or 13.9 percent of all
                                           telecom purchasing.

 SBC Supplier                      The award-winning SBC Supplier Diversity program has been
 Diversity Awards                  recognized by:
                                         The Ron Brown Award for Corporate Leadership – the
                                          only presidential award recognizing companies for
                                          outstanding achievement in employee and community
                                          relations – for fostering economic development in the
                                          communities SBC serves
                                          Being named as one of the 10 companies nationwide
                                           inducted into the Billion Dollar Roundtable, an initiative
                                           of Minority Business News U.S.A. and Women's
                                           Enterprise Magazine, recognizing the significance of
                                           companies that spend more than $1 billion annually with
                                           diverse businesses
                                          Listing for the third consecutive year as one of the “Elite
                                           Eight” by The Women's Business Enterprise National
                                           Council
SBC Communications Inc. (www.sbc.com) is one of the world's leading data, voice and Internet services providers. Through its
world-class networks, SBC companies provide a full range of voice, data, networking and e-business services, as well as directory
advertising and publishing. A Fortune 30 company, SBC is America's leading provider of high-speed DSL Internet Access services and
one of the nation's leading Internet Service Providers. SBC companies currently serve 56 million access lines nationwide. In addition,
SBC companies own 60 percent of America's second-largest wireless company, Cingular Wireless, which serves 23 million wireless
customers. Internationally, SBC companies have telecommunications investments in 25 countries

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