By Ronald Hedley
Rachel Kutz is VP, Strategic Initiatives, Global Supply Chain at AT&T. Although her journey to AT&T was unconventional and circuitous, she has now been employed for over 20 years by a company that she loves. She is especially proud of AT&T’s history of social responsibility. Kutz stated, “We started our supplier diversity program in 1968 and have [championed supplier diversity] for more than 50 years. It was a grassroots program that was started in Chicago by local employees.”
Kutz is referring to the Chicago Business Opportunity Fair. The sixties were a toxic time in the country, especially in Chicago. There, in 1968, a group of African American businessmen led a movement to promote minority businesses. Kutz recounted the event, “A lot of employees at the local Bell in Chicago, specifically the leader of procurement at that time, decided to build a grassroots program where they would work with the local minority coalition to target spend with diverse companies.”
That year, AT&T reported $175,000 purchases from nine diverse companies. The company has been a leader in supplier diversity ever since. “Just in the past three years, we’ve spent over $40 billion with certified diverse owned businesses,” Kutz shared.
As mentioned above, Kutz took a circuitous route to vocational felicity. But the twists and turns of her personal journey were valuable experiences that helped shape who she is today. She has a degree in astrophysics and can mix one heck of a drink. Still, the proverbial question must be begged: how does one get into supply chain at AT&T with an astrophysics background?
Childhood and Astrophysics
When asked about it, Kutz responded, “This connects to influences in my career. I was a little kid when Star Wars and ET [premiered]. My dad took me to see them. [Because of those films,] I wanted to be an astronaut.”
School was easy for Kutz, so her dreams of outer space were academically feasible. Perhaps it was too easy. “I played every sport. I was voted most likely to succeed. And I was in the top three of my class. When life comes too easily for you, you tend to take it for granted. In my senior year, I had missed all the deadlines to get into college. I screwed up and didn’t send in my paperwork,” she recalled.
Fortunately, Kutz was allowed to matriculate at the University of Colorado. “They had a great astrophysics program. The problem is if you graduate with [a degree in astrophysics, you] still don’t know how to be an astronaut.”
So, she turned to the fine art of mixology. “I worked as a server and bartender [throughout] school. I had a great time,” she recalled. But Kutz had to wonder: Will I end up pouring drinks the rest of my life?
But despite her doubts, there was hope. Kutz recalled, “I checked around to see what I could do for a living. Luckily, I networked with some people I knew in Colorado from the cell phone world. I was told, ‘With an astrophysics degree, you could design cell phone networks.’”
Kutz ended up in Detroit, Michigan where she got her start with ATT. She explained her first role within the company, and how she was able to exceed expectations: “I designed and optimized their wireless networks. I worked in wireless network operations for about 12 years, but what I really enjoyed was sales and the business side because I’m good at making difficult things accessible. When I indicated that I wanted to change roles, AT&T believed in me and offered a job in supply chain. Here I am still in supply chain 10 years later.”
A Conversation About Supply Chain Diversity:
How does the AT&T Business Development Program promote diversity?
AT&T’s program only utilizes companies that have been certified. We allow for a multitude of certifications. It does not just have to be the NMSDC (National Minority Supply Development Council). It can [also] be through local governments or state governments. [Our objective is] to make sure that companies qualify and are confirmed as diverse suppliers.
Why is diversity so important?
Diversity and inclusion are core values of AT&T. We have four pillars: our employees, the community that we serve, our customers, and our suppliers.
Supplier diversity is not just philanthropic. Over the past three years, we’ve worked hard to define the value to the business. If we can’t define business value, then supplier diversity [becomes] a feel good not a need to. And worse yet, it can be perceived as a compliance program.
If supplier diversity doesn’t lower cost and isn’t primarily philanthropic, what is its value to AT&T?
This is supply chain 101. The more suppliers that I have access to, the better value I get because it promotes competition, which of course improves quality and provides competitive costs. The value to us is that we get access to a larger supplier base, which is, again, Supply Chain 101. The more our supply chain and our value chain mirrors our employee chain and consumer base, the more business we can do.
[Supply chain diversity] really becomes a flywheel [that] improves the economy in our communities by utilizing these suppliers. They put more diverse employees to work. Those employees now have money to buy AT&T products. Those employees [also] tend to be more loyal because we are creating more revenue generation in those communities.
Are there metrics to support your assertion that diversity drives revenue creation?
At the end of this year, we’re going to publish, not only our spend with certified diverse suppliers, but also the number of diverse jobs that our supply chain spend supports.
What about tier 1 suppliers and supplier diversity?
It ties back to the economic impact in the community. This is more than just the diverse suppliers that we work with directly. This is about our tier 1 suppliers and making sure that they utilize a hearty supplier diversity program. This is about AT&T’s value chain, and it’s about utilizing spend to ensure that everyone we do business with shares AT&T’s values and is doing their part to increase their use of diverse suppliers.
Are you concerned about slavery in the supply chain?
Yes, we absolutely [are]. We look at our suppliers and our supplier base. We [strive] to hold them as accountable as we hold ourselves. A lot of the values and the programs that AT&T supports, we push into our supplier base.
In 2019, we became an official signatory for the UN Global Compact. Being a signatory [signifies] that we advance social and environmental [issues] through our policies, programs, and actions. These principles are embedded in our company values.
How does the UN Global Compact affect your suppliers?
We write in our contracts that [our suppliers] need to be following fair labor standards. We make suppliers [accountable] to us through our Principles of Conduct for Suppliers [policy]. We also have a human rights and communication policy [detailing] that suppliers will not use involuntary labor, child labor, prison labor, debt bondage, or indentured or forced labor. When something’s important to us, we spell it out [in the contract].
How do you ensure that your suppliers comply?
We monitor [our] suppliers. We hold them accountable through a contract, and we can put them in breach if we find out [that they are not upholding that contract]. We became members of JAC (Joint Audit Cooperation). It’s an organization that facilitates collaboration among our peer telecom companies and manufacturers. They audit supply chains worldwide to verify [compliance]. They monitor labor practices, human rights, health and safety, [and] ethics and environment [for AT&T].
My final question to Kutz was not focused on supply chain. Instead, I asked her about achieving success as a woman in a man’s world.
Kutz attributes her success to the role models that have influenced her life: “I have been so lucky to have grown up when strong women were [considered] cool. As a woman, you take a lot of heat being smart. When you [reach] your teenage years, it’s almost not cool to be smart. [I had] role models that were smart. [Princess Lia, Kelly McGillis, and my grandmother] were influencers to me because they told me that it was cool to be smart. And it was cool to do what I wanted to do, and nothing could hold me back.”
The supply chain world is fortunate that Kutz has not held back. She is an influencer whose impact reaches far beyond her official role at AT&T. She said, “What I’m about is getting other corporations to recognize that they need to change their approach to supplier diversity.”
She ended our interview with a reference to her astronaut dreams of yore:
”I think the sky's the limit.-Kutz