The Assessment of Excellence in Procurement Benchmarking evaluates companies across several key dimensions and provides insights on how to improve procurement practices and capabilities through:
- Identification of key processes and level of capabilities required to drive value
- Specific process improvements for achieving efficiency and effectiveness in critical supply management processes
- Technology improvements required to support the strategic and tactical activities of the supply management organization
- Supply management improvement roadmap for addressing near-term and long-term goals
The Stages of Excellence are especially helpful in describing what each stage looks like, to help supply managers understand the specific capabilities/ tools they need to add at each stage to get to the next level of performance.
A.T. Kearney Procurement & Analytic Solutions has set the standard for best in class supply management, sourcing and analytic solutions. Our strategies are based on proven methodologies from decades of experience. Our A.T. Kearney supply management stages of excellence is the leading best practices repository, refreshed continually on practical leadership practices and emerging trends in supply management.
For a large, publically traded managed health care company, we conducted a Stages of Excellence in Supply Management assessment. The findings were leveraged to help the overall company with its mission to provide health benefits through group, individual, Medicare, Medicaid and Veterans Affairs programs.
Supply management had made significant cost savings contributions to the bottom-line while managing over $2B in external spend, but its overall impact was sub-optimized. Our Stages of Excellence approach examined processes and practices across a full range of supply management activities, including:
- Procurement and Supply Management Strategy
- Organizational Alignment
- Strategic Sourcing and Category Management
- Supplier Relationship Management
- Operation Process Management
- Performance Management
- Knowledge / Information Management
- Human Resource Management
The Stages of Excellence approach was critical to the development of the comprehensive Supply Management Transformation roadmap. The Stages of Excellence drove tough conversations on where specifically the organization needed to improve, what needed to occur to get to the next level and brainstorming around strategies to 'leap-frog' capabilities in various areas. The final assessment resulted in a transformation roadmap that included the introduction of a variety of advanced tools, approaches and mindset changes, including:
- Innovative and best-in-class strategic sourcing strategies utilizing a full-range of procurement value-creation levers such, as joint process improvements, relationship restructuring, demand management and specification management
- Development of deep expertise in key categories and supply markets and upgraded skills within the procurement and business units to support on-going procurement effectiveness
- Increased stakeholder engagement to collaborate in developing and implementing improved category management strategies and to re-evaluate and challenge longstanding and/or relationship-based supplier agreements.
- Investments in resources and tools to provide robust data analytics and reporting capabilities to the procurement function to support pro-active strategic planning.
- Implementation of new technologies to increase compliance and end-user satisfaction.
In total, over $600 million in annualized spend was targeted to yield an improvement of almost $50 MM in incremental value through a subsequent sourcing effort, combined with organization and systems transformation effort to sustain the results over time.