Study: Balance Customization and Scale for Advantage

Telecom Supplier Diversity Task Force also issues recommendations for reinvigorating diversity in the supply chain

Telecom Supplier Diversity Task Force also issues recommendations for reinvigorating diversity in the supply chain

San Antonio  September 9, 2003  In a bid to help diversity suppliers nationwide regain business opportunities in a down economy, SBC Communications Inc., a data, voice and Internet services provider, recently sponsored a Telecom Supplier Diversity Task Force study to revalidate the role diversity suppliers play in more profitable supply chains.

The study, "Revitalizing the Supplier Diversity Value Proposition Through Supply Chain Effectiveness," finds that in order for a supply chain to be competitive, it must have the right balance between the need for customization and the need for scale. SBC said this balance involves successfully integrating small businesses into the supply chains of larger firms in order to leverage the competitive advantage small businesses offer: responsiveness, customized services and lower costs.

In addition to this finding, the Telecom Supplier Diversity Task Force study, led by Dr. Alfred Osborne Jr., senior associate dean and associate professor of global economic management at the UCLA Anderson Graduate School of Management, provides 21 recommendations to improve both supplier diversity and supply chain management.

The task force also offers practical and specific tools and processes, covering topics such as sourcing, risk mitigation, process quality and control, financial management and collaboration, to strengthen and balance supply chains in telecom and in other industries as well.

Edward Whitacre Jr., chairman and CEO, SBC Communications Inc, commented that, "One of our primary goals in creating this task force together was to develop recommendations on how the telecom industry can work collaboratively to revalidate and revitalize supplier diversity programs, as well as further solidify our leadership in this arena."

To prepare the report, the Telecom Supplier Diversity Task Force spent more than a year conducting over 60 interviews with suppliers and procurement and financial experts, making site visits, and reviewing case studies and best practices.

The Telecom Supplier Diversity Task Force reviewed five basic models of diversity participation in the telecom supply chain: subcontractor, contract manufacturer, prime supplier, value-added reseller and channel partner. It then identified what it believes are five critical focus areas necessary to leverage the participation of diversity suppliers through improved supply chain performance:

  • 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

"The recommendations and tools provided in this study reflect the input and collaboration of individuals representing different aspects of the telecom supply chain, including service providers, original equipment manufacturers, electronic manufacturing service providers and diversity suppliers," explained Osborne. "We are now working with other industries organizations across the country to implement these recommendations and create business opportunities for diverse businesses while providing large businesses with key competitive advantages."

Osborne, of the UCLA Anderson Graduate School of Management, said the task force is working with the National Minority Supplier Development Council, QuEST Forum (Quality Excellence for Suppliers of Telecommunications), Women's Business Enterprise National Council, the Association for Service Disabled Veterans, the Institute of Supply Chain Management and UCLA, in addition to SBC, on the distribution and implementation of the 21 recommendations provided in the study.

The recommendations are outlined in the report, available at