Achieving World Class Supply Management- As Easy as A, B, C (No Really!

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Dr. Peter OReilly, C.P.M. Associate Vice-President AMERIGROUP 516-334-5138; drpor@aol.com

Definition of World Class Supply Management

! Being responsible for 90%+ of all global spend ! Use of E-Procurement System and supporting software packages to process more than 75% of all spend ! Achieve in excess of 90% of good to excellent grades in customer surveys ! Attaining more than 5:1 savings to cost ratio ! Have a dynamic professional development program for supply chain staff ! Participate regularly in customers planning sessions and have customers join in supply management planning sessions ! Having a leader with a vision and a plan

5/14/2003

Annual International Supply Management Conference

Why Take on the Challenge of Achieving World Class Status?

! Provide Competitive Advantage for Company ! Opportunity for Personal and Professional Growth ! Survival of the Fittest ! Have some Fun

5/14/2003

Annual International Supply Management Conference

Pitfalls of the World Class Journey

! Lack of resources ! Weak support from senior management ! Not up to the challenge ! Other priorities ! No time for fun

5/14/2003

Annual International Supply Management Conference

Strategic A Factors
! Associates ! Attitude ! Analytical Skills ! Assertiveness

5/14/2003

Annual International Supply Management Conference

Strategic B Factors
! Business Planning ! Bottom Line ! Be Believable ! Be a Winner

5/14/2003

Annual International Supply Management Conference

Strategic C Factors
! Customer-driven ! Change Management ! Communications ! Credibility ! Cost Reductions ! Computer-related Tools ! Chief Purchasing Officer
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5/14/2003 Annual International Supply Management Conference

Matching up the definition of World Class Supply Management with the A,B,Cs
! 90%+ Global Spend- Attitude, Analytical Skills, Assertiveness, Business Planning, Bottom Line, Cost Reductions, Computer-related Tools ! 75%+ E-Procurement Spend- Analytical Skills, Business planning, Bottom Line, Change Management, Cost Reductions, Computer-related Tools ! 90%+ Customer Satisfaction- Associates, Attitude, Business Planning, Believable, Customer-driven, Change Management, Communications, Credibility, Annual International Supply CPO 5/14/2003 Management Conference

Matching up the definition of World Class Supply Management with the A,B,Cs
! 5:1+ Savings Ratio- Associates, Analytical Skills, Assertiveness, Business Planning, Bottom Line, Change Management, Cost Reductions, CPO ! Dynamic and Professional Staff- Associates, Attitude, Assertiveness, Business planning, Believable, Be a Winner, Customer-driven, Change Management, Communications, Credibility, CPO ! Leader with a Vision and a Plan- Attitude, Assertiveness, Business Planning, Believable, Be a Winner, Customer-driven, Change Management, Communications, Credibility, CPO

5/14/2003

Annual International Supply Management Conference

Lessons Learned
! Lofty ambitions are fine, but lofty results are finer ! Make it a team effort but merely a supply management initiative ! Do not expect too much quickly ! Be responsive to changing factors ! Be resilient and flexible ! Frequent victories are welcomed by all
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5/14/2003 Annual International Supply Management Conference

Final Thoughts
! In most cases, the processes involved in achieving a world class supply management organization are as important as the results, as they become the foundation for long term growth and for generating a constant source of opportunities for the company.

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5/14/2003

Annual International Supply Management Conference