quality and operations commitment to excellence driving value from a supplier relationship...
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Quality and Operations commitment to excellence
Driving Value from a Supplier Relationship Management Program
Presented by Kelly Carey, CPM
Quality and Operations commitment to excellence
Integrity, Honesty, Safety and Quality
We will conduct business with integrity and honesty in compliance with all laws
and Company policy.
We are committed to produce products that are safe and of the
highest quality for our customers.
Quality and Operations commitment to excellence
Agenda
• Covidien Overview• Welcome• Women in Supply Chain
• Driving Value from Supplier Relationship Management (SRM)
Quality and Operations commitment to excellence
Covidien is …
• A global healthcare products manufacturing company with nearly $10 Billion in annual revenue
• Well positioned with a diverse portfolio of products and technologies in attractive franchises
• A company with a history of quality and innovation
• Highly efficient and productive, producing strong margins and cash flow
• A leading player across our portfolio
Quality and Operations commitment to excellence
Medical Supplies$1.8B
2012 Net Sales by Business Segment$9.9 Billion
Medical Devices$8.1B82%
18%
Quality and Operations commitment to excellence
Medical Devices Overview2012 Sales by Product Group
2012 Net Sales: $8.1B
Strong franchises, market leadership positions and a highly diversified product portfolio
Focus on growth through innovation, product leadership with superior clinical evidence, acquisitions and further geographic expansion
Ramp up R&D, globalize footprint and accelerate new product launches
29%
11%
16%11%
9%
20%
4%Vascular
Energy
Endomechanical
Soft TissueRepair
Airway & Ventilation
Oximetry &Monitoring
Other
Quality and Operations commitment to excellence
Medical Supplies Overview2012 Sales by Product Group
2012 Net Sales: $1.8B
Leading provider of a broad range of high quality products used to improve patient care, including wound care, incontinence, needles & syringes, enteral feeding, operating room kits and accessories
#1 or #2 market positions across core product categories
Nursing Care
MedicalSurgical
OriginalEquipmentManufacturer
46%
25%
17%
12%
SharpSafety
Quality and Operations commitment to excellence
Members of COV Global Sourcing Teampresent tonight
• Carl Resteghini• Kelly Carey• Keith Lapointe• Ann McCaffrey• Kim Hardy• Lisa Taylor• Courtney Sullivan• Abhinav Singh• Jane Comeau
• Vanessa Linke• John Richardson• Brian Budzinski• Lauren Bell• Jeff Wright• Marlon Lapp• Bruce Graham• Robert Simonelli• Kevin Brennan (HR)
Quality and Operations commitment to excellence
Welcome Northeastern Supply Chain MBA Students
Quality and Operations commitment to excellence
Women in Supply Chain
Christine Bynarowitz, Sr. Manager, Covidien
Quality and Operations commitment to excellence
Women in Supply Chain Network
ObjectiveAttract and retain talented women in the Supply Chain function by providing leadership development and networking opportunities for women
Areas of Focus• Opportunities to network with other women in the Supply Chain
function• Visibility to career path options in Supply Chain• Access to guest speakers and philanthropy events• Leadership development and training opportunities
Quality and Operations commitment to excellence
Upcoming Events
Month Activity
August Official Kickoff Luncheon
September Workshop: “How to Prepare for a Performance Review & Discussion”
October Workshop: “How to Write a Robust IDP”
November Panelist Discussion: “Supply Chain Career Paths at Covidien”
December Local Philanthropy/Networking Event
January Guest Speaker: Jessica Hameline – “Market Forces Shaping Covidien”
The best way to stay informed about upcoming events is to join our PulseConnect site!
Complete
Complete
Complete
Quality and Operations commitment to excellence
Healthcare Businesswomen’s Association (HBA)Covidien is a Corporate Sponsor of the HBA which offers educational, networking and leadership development opportunities to men and women to develop themselves as leaders in the healthcare industry.
Covidien HBA Ambassadors MaryJo Griffin [email protected] Kristin Watson [email protected]
Interested in joining the HBA? Covidien employees receive a discounted rate – learn more at: http://www.hbanet.org/join-hba
Quality and Operations commitment to excellence
Driving Value from Supplier Relationship Management
David Wohler, VP Global Sourcing
Quality and Operations commitment to excellence
Increase business value derived from collaboration Innovative/flexible
Reduce demand activity,complexity and variability Aligned/loyal
Shift from lowest price to TCO Operationallyexcellent
Right goods/services at the right price Priced competitively
Right goods/services at the right time and place Reliable/solvent
Value Mgmt.
DemandManagement
Total Cost of Ownership
Purchased Cost Reductions
Protecting the Revenue Stream(Supply Assurance)
Valu
e
Supply Value Proposition Role of Supply Base
Source: 2011 The Hacket Group, Inc. ; All Rights Reserved
Supplier Relationships Must Evolve to Deliver Value
Collaboratively Focused
Transactionally Focused
Quality and Operations commitment to excellence
Definition of SRMSupplier Relationship Management (SRM) is a model and supporting processes for maximizing the value of supplier relationships to the organization over the full relationship lifecycle. SRM defines approaches for on-going enterprise-wide interaction with suppliers as well as with other internal company personnel to plan and manage the relationships. SRM also defines formal mechanisms for targeting and driving proactive value generation and managing challenges and gaps
SRM at Covidien Is SRM at Covidien Is Not
• A cross functional program that aligns supply chain activities with business needs
• A model for managing on-going interactions with suppliers in a way that maximizes long-term value
• A different view or mindset of the elements of joint Covidien and supplier success
• Just a procurement initiative• The same thing as Strategic Sourcing or
Category Management• A technology initiative• Executed as a one-time project• Managed the same way across all suppliers• A quick fix• A new way to get margin concessions from the
supply base
Quality and Operations commitment to excellence
Elements of Supplier Relationship Management
Supplier Stratification
Supplier Enabled
Excellence
SRM Governance
Performance Management
Supplier relationships will be stratified based
on strategic importance to prioritize resources
and tailor management processes
Capabilities of existing suppliers will be
developed to deliver continuous
improvement and proactive value
generation
Structured cross-functional model
organized to maximize collaboration and
effectively manage relationships
Supplier performance will be managed across different supplier types and strata to maximize
performance
Quality and Operations commitment to excellence
Stratification Tiers and Logic
Exit
Strategic
Core
Value
Covidien’s most strategic Suppliers with whom the organization will develop long-term strategic relationships to drive joint value
Medium to long-term relationships that deliver significant value with active management and opportunistic investment
Short-term transactional relationships with Suppliers that meet basic performance needs
Value Creation&ROI
0-4 per GBU
# Varies by Category
Bottom 60-80% of Supply Base
Supplier Criteria Definition
Quality and Operations commitment to excellence
Stratification Tiers and Logic – Internal Use Only Showcase Suppliers Identified for Growth
Exit
Strategic
Value
Covidien’s most strategic Suppliers with whom the organization will develop long-term strategic relationships to drive joint value
Medium to long-term relationships that deliver significant value with active management and opportunistic investment
Short-term transactional relationships with Suppliers that meet basic performance needs
Value Creation&ROI
0-4 per GBU
# Varies by Category
Bottom 60-80% of Supply Base
Supplier Criteria Definition
Core Business
Medium to long-term relationships that deliver significant value. Will not require investment
Core Investing
Quality and Operations commitment to excellence
Supplier Perspective
Cash Cow Develop
Maintain Monitor
SPEND
GROWTHHL
H
M
M
Quality and Operations commitment to excellence
SRM Phase II
• Exit Suppliers as Identified • Reassess Stratification as needed to ensure
Alignment with OrganizationStratification
• Manage Suppliers to Stratification Ratings• Relationship Charters Solidified for
Strategic/Core Investing SuppliersGovernance
• Engage in Agreed Development Activities • Develop the Strategic/Core Investing
Suppliers with Specific Plans of Engagement and Monitoring
Supplier Enabled Excellence
• Monthly Supplier Collaboration Meeting • Track # Suppliers Added/Deleted to GASL• Limited Status Rating Change Agreement
Supplier Performance
Quality and Operations commitment to excellence
Final Thoughts Reduce Supply Base per Stratification
Engage Deeper with Strategic /Core Investing Supply Base• Early Supplier Engagement with R&D• Suppliers On Site working with COV Development Teams • Engagement with Supplier Development Teams
Continue One Covidien Supplier Collaboration Meeting
Track and Monitor Progress
Link Improvement to Overall Business