How they built their best-in-class supplier development program.
When Freddie Mac started its Supplier Diversity Academy in 2016, the goal was to help current and new suppliers better understand how to work with, and win work from, the company. Four years later, Freddie Mac has graduated more than 50 diverse suppliers from its academy. During this time, 40% of these graduates have earned contracts with Freddie Mac as a result.
Freddie Mac started its journey to create the academy by conducting educational sessions for diverse suppliers focused on the organization’s procurement processes and the needs of the business. The sessions also provided access to decision-makers and allowed suppliers to present their capabilities. Freddie Mac gained a better understanding of what the suppliers could offer and the suppliers, in turn, learned what it takes to become a business of choice at Freddie Mac and other organizations.
“We knew we wanted to create a unique supplier diversity development program and felt the best place to start was by partnering with an expert in the field,” says Employees and Suppliers Director Tomaneci Waller-Day, Office of Inclusive Engagement at Freddie Mac.
Freddie Mac chose Marilyn Johnson, founder of MH Johnson & Associates, a woman- and minorityowned business. Johnson and her team are leaders in developing and implementing customized, awardwinning supplier development programs. Working with Johnson, the company pulled together a team of Freddie Mac leaders with knowledge about access to opportunities, business needs, engagement opportunities and development best practices.
”We’re certainly open to new diverse business partnerships, but during these challenging times our priority is to help our existing small and diverse suppliers increase their footprint at Freddie Mac.
He added that prior to the COVID-19 pandemic, the academy program spanned over five months and educated suppliers on how to do business with Freddie Mac. Suppliers had face-to-face access to decision-makers in the business and in the Enterprise Supply Chain. “Suppliers were also able to share their capabilities and learn more about business division needs,” says Suber. “Since the pandemic changed our ability to bring people together in that way, we quickly pivoted to compress our program into a one-month learning experience comprised of four targeted online modules.” (See sidebar for overview of module contents)
In addition to shifting to a virtual learning environment, Freddie Mac also altered its focus from both cultivating existing relationships and seeking new ones, to concentrating its efforts on strengthening the supplier relationships they already have in place. “We’re certainly open to new diverse business partnerships, but during these challenging times our priority is to help our existing small and diverse suppliers increase their footprint at Freddie Mac,” says Enterprise Supply Chain Vice President William Bagley.
Freddie Mac also recognized small businesses may face hardships due to the pandemic and is accelerating its payment terms. The result is more than 200 small and diverse business suppliers could receive payment on invoices 20 days earlier than the standard payment terms. “In some cases, we’ll make payment in as little as five days. Earlier access to these funds helps our small business partners cover overhead expenses they may be having difficulty keeping up with during this time,” says Bagley. “Some organizations see their supplier diversity program as merely a tool for recruiting new talent and increasing their supplier pool. However, we truly view our relationships as sustainable partnerships with the goal of benefitting both the supplier and Freddie Mac.”
This approach to supplier diversity has resulted in benefits for both Freddie Mac and the suppliers by cultivating an environment of healthy competition and learning. “We believe our support and upskilling of diverse suppliers to win work with Freddie Mac doesn’t just make good business sense, it’s also a business imperative which creates healthy competition and spurs innovation,” says Suber. “These partnerships challenge the status quo, not only in the financial services industry, but for all businesses looking to add the right mix of diverse suppliers to their service provider options. We’re proud to be on the cutting edge of leveraging diversity as a competitive advantage.”
FREDDIE MAC’S SUPPLIER ACADEMY ONLINE LEARNING MODULES
In response to the pandemic, Freddie Mac had to quickly transition from a five-month, face-to-face learning program to an equally impactful online model. The following is a brief summary of the four-part series of modules now in place. The modules are taken over a one-month period, so participants can hit the ground running and win work faster.
■ Module #1: Freddie Mac 101
This first module provides the history of Freddie Mac with an emphasis on corporate goals, organization business needs and more.
■ Module #2: Supplier Development Session
This session focuses on adding value to the participants’ businesses through activities like website evaluations, proposal writing workshops and presentation workshops.
■ Module #3: Capability Presentations
Suppliers present their capabilities to an audience of Freddie Mac business area representatives and category managers.
■ Module #4: Action Plan Meetings
Meetings are held with managers and suppliers to identify areas of opportunity within the divisions and pinpoint two to three action items to help increase the suppliers’ chance of obtaining business with Freddie Mac and other organizations.