This project was all about establishing a Global Capability Center of Excellence (CoE) for procurement to streamline processes, enhance operational efficiency, and foster a customer-centric culture for a healthcare client. The aim was to build robust foundations, achieve operational excellence, and re-imagine customer engagement through extraordinary change management. Customers are from all locations, including manufacturing, service centers, and offices across US and Europe.
Background
The project spanned several years, with distinct phases focused on different aspects of the Capability Center’s development:
- Year 1-Year 2: Rollout phase focused on building the foundations.
- Year 3-Year 4: Operational excellence phase aimed at standardizing and optimizing processes.
- Year 5+: Customer culture phase focused on enhancing customer satisfaction and loyalty.
Methodology
The project followed a structured approach across three key phases:
Phase 1: Rollout (Year 1-Year 2)
- People Involved: 15
- SOPs Created: 105
- Key Activities:
- Resource Mobilization: Assembled a dedicated team to drive the initiative.
- Customer Experience: Defined around the Voice of the Customer (VOC) to ensure alignment with client needs.
- Operating Mechanism/Rhythm: Established regular operating procedures and communication channels.
- Building the Foundations: Laid the groundwork for a robust procurement system, including:
- Oracle Purchasing
- Vendor Master
- Service Sourcing-EU
- Invoice Processing
- Coupa
- Ariba
Phase 2: Operational Excellence (Year 3-Year 4)
- People Involved: 90
- SOPs Created: 350
- Key Activities:
- Objective Locking: Clearly defined objectives and aligned them with overall business goals.
- Communication & Training: Launched comprehensive communication and training campaigns to ensure smooth implementation.
- Satisfaction to Loyalty: Shifted focus from merely satisfying customers to fostering loyalty.
- Operationalizing the Strategy: Implemented and optimized key procurement processes:
- New Acquired Business (SAP)
- New Acquired Business (JDE)
- Costing and Variance Analysis
- AP Reconciliation
- SSRP Tasks
- Vitality, Wee Rohs
- Parts Classification
- ECR, SCR
Phase 3: Customer Culture (Year 5+)
- People Involved: 105+
- SOPs Created: 410+
- Key Activities:
- Systematic & Predictable Processes: Developed systematic and predictable customer processes to enhance reliability.
- Adding Value: Integrated analytical tasks to add more value to the procurement function.
- Re-Imagining Customers: Focused on re-imagining customer interactions to enhance satisfaction and loyalty.
- Tools & Dashboards: Developed and implemented supplier dashboards and should costing tools:
- Supplier Dashboard-EU
- Should Costing – Electro Mech parts
Outcomes
The implementation of the Global Capability Center for procurement led to significant improvements:
- Standardization: Established over 410 standard operating procedures (SOPs), ensuring consistency and efficiency.
- Resource Optimization: Mobilized and effectively utilized resources across different phases, involving over 105 personnel.
- Customer Satisfaction: Enhanced customer satisfaction and loyalty through systematic processes and value-added tasks.
- Cost Savings: Achieved substantial cost savings through optimized procurement processes and better supplier management.
- Operational Efficiency: Improved operational efficiency by integrating advanced procurement tools like Coupa and Ariba.
Conclusion
This case study demonstrates the effectiveness of establishing a Global Capability Center CoE for procurement in driving operational excellence and fostering a customer-centric culture for a healthcare client. By systematically building foundations, operationalizing strategies, and re-imagining customer engagement, the project significantly improved procurement efficiency and customer satisfaction.
Acknowledgments
The successful implementation of this project was due to the collaborative efforts of the procurement, sourcing, and project management teams, who worked diligently to ensure the achievement of project goals and objectives.
Future Plans
Building on the success of this project, the organization plans to:
- Expand the Capability Center framework to other regions and business units.
- Continuously review and optimize procurement processes to maintain efficiency and cost-effectiveness.
- Enhance supplier collaboration and the integration of advanced analytical tools to drive further value and innovation in the procurement function.
