Case Study:

US Biotech firm activates Supply Base Management to deliver value-add from critical suppliers

Client

A leading US Biotechnology company undergoing significant business growth, with turnover projected to double over the next 5 years. With rapid growth and an increasing demand on its procurement team to source critical services and material to support major global vaccine programmes, expert support from Procura was enlisted.

The Challenge

With over 280 suppliers providing a range of raw materials, lab supplies and chemical components, effectively managing the supply chain is vital for the client’s business success. However, the current Supply Base Management approach tended to be very transactional, with limited supplier engagement, and based on qualitative opinions, rather than quantitative data.

With no structured Supplier Relationship Management (SRM), contract management or supply chain risk management processes in place, the challenge was to introduce a formalised approach to managing suppliers which would support targeted cost reduction and activate value-add from critical suppliers.

Approach

Procura adopted a three-step approach to launch the Supply Base Management programme:
• Review current situation and understand objectives,
• Define Supply Base Management model and segmentation approach,
• Segment the supply base and provide Roadmap for SBM

Working closely with the executive and procurement team, a segmentation model was developed, based on agreed criteria and clear segmentation which differentiates a high-criticality supplier from a low-risk tail spend supplier.

Following sign-off, a detailed implementation roadmap, based on Procura’s SBM Process House, was developed to put in place appropriate supplier management processes for each segment of the supply base; for Critical suppliers, for Preferred and Approved and also appropriate SBM processes for the tail.

Results

• Comprehensive assessment of the client’s current approach to Supply Base Management
• Clearly defined objectives for the future operating model
• Well-defined and structured supply base segmentation model
• Repeatable segmentation process for all new and existing suppliers
• Clear roadmap and detailed next steps for further Supply Base Management optimisation

The SBM Roadmap embeds the Supply Base Management approach with a detailed implantation programme that includes SRM, Contract Management and Risk Management. Aligned with a Cost Optimisation programme Procura continues to work collaboratively with the client to develop the maturity of its entire procurement function towards ‘Procurement Excellence’.

 

For further information or to discuss how Procura could help your organisation – please get in touch:

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