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Supply Management Stages of Excellence Framework

The A.T. Kearney Procurement & Analytic Solutions "stages of excellence" assessment provides companies with insights into how their supply management capabilities compare on a spectrum of leading practices. A "stages of excellence" assessment helps to identify improvement areas by understanding the gap between the current status of supply management practices and performance improvement levels.

The A.T. Kearney Stages of Excellence framework contains supply management practices stratified into four levels of performance ranging from Level I – Basic Execution to Level IV - World-class. The framework captures qualitative performance descriptions at a detailed process-by-process level. The framework organizes processes along the same dimensions as the A.T. Kearney House of Procurement Supply®:
  1. Supply Management Strategy
  2. Organizational Alignment
  3. Strategic Sourcing & Category Management
  4. Supplier Relationship Management
  5. Operating Process Management
  6. Performance Management
  7. Knowledge / Information Management
  8. Human Resource Management
This framework is continually refreshed based on our experience helping clients achieve savings faster and our worldwide know-how and innovative leadership in supply management (sophisticated tools, supplier strategies, proven processes and spend analytic capabilities).

Combining our in-depth understanding of industry requirements and trends, we leverage stages of excellence framework to help clients determine which 'Best-in-Class' supply management capabilities are needed to drive value and what investments are required to get to the next level of performance.

  • Evaluates supply management at the key process level to identify specific performance improvement opportunities
  • Evaluates supply management processes in the broader context of corporate mission, organizational set-up, and enabling functions and tools to focus improvement opportunities in specific functional areas that will drive value
  • Facilitates a discussion on the positioning of client's supply management practices vs. leading practices
  • Leverages the company's knowledge and A.T. Kearney’s stages of excellence and experience to produce a comprehensive assessment
  • Defines and helps prioritize improvement opportunities based on quantitative and qualitative assessment of business requirements, current capabilities and A.T. Kearney’s supply management stages of excellence.
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.

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  supply management stages of excellence framework
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AEP study results reveal new supply realities
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