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.

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2017 Assessment of
Excellence in Procurement
Mobilizing for
Excellence
in Supply
Management

2. Mobilizing for Excellence in Supply Management
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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.

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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. Mobilizing for Excellence in Supply Management
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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

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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

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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.

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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.

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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. Mobilizing for Excellence in Supply Management
Accelerate progress to earn or grow
your seat at the table
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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. Mobilizing for Excellence in Supply Management
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Leverage these
insights to improve
your organization’s
supply management.

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.
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2017 Assessment of Excellence
in Procurement