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A.T. Kearney — Mobilizing for Excellence in Supply Management

Global markets will continue to demand more from supply management. A.T. Kearney’s research on supply management leaders has found that top performers in the field sustain their effectiveness by following a three-part success formula to achieve excellent supply management capabilities and spectacular performance.

A.T. Kearney — Mobilizing for Excellence in Supply Management

  1. 1. Read full report 2017 Assessment of Excellence in Procurement Mobilizing for Excellence in Supply Management
  2. 2. Mobilizing for Excellence in Supply Management Read full report While many companies have made significant progress in supply management, there is still work to be done. Looking ahead, supply management deserves a harder focus as external spend is typically the biggest piece of any company’s P&L.
  3. 3. Mobilizing for Excellence in Supply Management Read full report Only 7 percent of companies are considered leaders— demonstrating excellent supply management capabilities and spectacular performance. Source: A.T. Kearney analysis Leaders get a broader scope of value % responding “high impact” Leaders get nearly 3X higher hard dollar return 1.6x 13x2.5x 4x 7x Leaders All others Short-term cost Supply risk Structural total cost Innovation Talent source 68% 60% 60% 50% 90% 42% 22% 15% 7% 7% Top quartile Middle 50% Bottom quartile 1 13 4.5
  4. 4. Mobilizing for Excellence in Supply Management Read full report Supply management leaders are more likely to invest for the future in areas such as: • Leveraging digital technologies • Driving innovation with suppliers • Measuring procurement’s contribution to the business
  5. 5. Mobilizing for Excellence in Supply Management Read full report Leaders attain and sustain their effectiveness by following a three-part success formula to achieve excellence. Category excellence Team excellence Catalyst for business alignment… … and enables sustainable results The most powerful cost reduction lever, identifying key business insights Generates 73% of procurement value Supplier excellence Compliance and competitive advantage through innovation and risk management Generates 27% of procurement value
  6. 6. Mobilizing for Excellence in Supply Management Read full report Team excellence • Supply management is a business partner in leading companies, with more than 90 percent of leaders reporting to the C-level. • Leaders transform their supply management operating models and organizations to focus on strategic, value-creating activities. • Leaders provide entrepreneurial opportunities and invest in skill development to attract and retain their strategic talent.
  7. 7. Mobilizing for Excellence in Supply Management Read full report Category excellence • Category excellence is the most powerful cost-reduction lever, generating about 73 percent of procurement value. Additionally, it provides key insights about supply markets that help to shape the company's business strategy.
  8. 8. Mobilizing for Excellence in Supply Management Read full report Supplier excellence • Supplier excellence ensures that suppliers comply with contractual requirements and, more importantly, that the company reduces overall supply risk and gains competitive advantage through more rapid and mean- ingful innovation from supply markets. Source: A.T. Kearney analysis Sourcing and contracting Supplier life cycle Making progress Well advanced Limited progress Joint improvement Compliance and payment Leaders monetize the full supplier life cycle
  9. 9. Mobilizing for Excellence in Supply Management Accelerate progress to earn or grow your seat at the table Read full report If you are standing still, you are falling behind. Every company needs to mobilize for success regardless of where it lies along the spectrum. Strugglers Aspirants Focus on strategic sourcing Drive more value from a broader array Go from good to great Leaders Leverage brand and talentThe Pack 11% 7% 27% 55% Source: A.T. Kearney analysis
  10. 10. Mobilizing for Excellence in Supply Management Read full report Leverage these insights to improve your organization’s supply management.
  11. 11. Mobilizing for Excellence in Supply Management A.T. Kearney is a leading global management consulting firm with offices in 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com. Read full report Talk to our experts Learn more about the 2017 Assessment of Excellence in Procurement

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