Cognitive Sourcing Maturity Assessment

What is the total annual direct materials spend for your organization?

• < $500M

• $500M - $1B

• $1B - $2B

• $2B - $5B

• $5B+

About how many direct materials sourcing professionals are in your organization (including commodity/category manager, sourcing operations, buyers, business analysts, etc.)?

Does your organization have a digital transformation initiative in procurement and/or direct materials sourcing? If so, how long has it been active?

• Nothing formally launched and not active discussion/planning at this time.

• Nothing formally launched, but initiatives are at the planning stage

• Initiative launched, less than 1 year.

• Initiative in place, 1 to 2 years in active status.

• Initiative maturing, 2 to 3 years in deployment and adoption.

How important is "data-driven procurement" process for your sourcing professionals?

• 1 (low importance)

• 2

• 3

• 4

• 5 (critical to success)

What organization structure best describes your sourcing team?

• Decentralized or Siloed - Direct materials sourcing and commodity management teams are integrated into individual manufacturing sites, operating companies, or product units. Coverage of suppliers or commodity/categories may overlap across different organizational units.

• Centralized - A model in which all procurement goes through a single, central organization. Focus is on leveraging corporate spend across the enterprise, standardizing sourcing and procurement processes and compliance. Often includes both indirect and direct procurement categories.

• Center-led - Center-led organizations often form a procurement center of excellence (COE) that focuses on corporate supply chain strategies and strategic commodities, best practices, and knowledge sharing while leaving individual buys and tactical execution to the individual business units.

• Cross-Functional - Extends on either centralized or center-led organizational models, with clear internal cross-functional process alignment with stakeholders and decision makers in peer groups, including supply management, product operations/engineering, finance, and manufacturing.

Please rate your organization's career development culture.

• Stagnant

• Average

• Exciting & Innovative

How often are sourcing professionals sent for training and continuing education?

• Informally

• Annually

• 1-2 times per year

• Quarterly

• Continuously

What percentage of time do sourcing professionals spend “putting out fires?”

• 0-5%

• 5-15%

• 15-25%

• 25-50%

• 50%+

As an organization, how do you measure effectiveness and performance of the strategic sourcing function?

• Informal - Develop informal goals at category level and goals are subject to change.

• Annual Cost Savings Focused - Year over year goals are primarily savings focused, are based upon previous experience and driven from leadership.

• Sustainable Cost Management - Targeted cost savings looking at longer term and sustainable cost management dynamically tied to industry benchmarks.

• Value Creation - Performance expectations are mutually guided including variable compensation/bonuses for meeting performance goals which aren't always savings focused but rather include: avoiding risk, achieving opportunities, and discovering innovations.

• Real Time Orchestration Performance expectations are more real-time and detailed yielding more accurate predictions that result in the ability to capitalize more quickly to changing market conditions. Involves cross-functional decision making and orchestration across finance, supply chain, and product engineering teams.

With digital transformation approaching  supply chain and procurement, is your sourcing professionals team and talent ready to take this on?

• 1 (low readiness, resistant to change)

• 2

• 3

• 4

• 5 (high readiness, rapidly adopting)

What tools and technologies are utilized to support strategic sourcing intelligence and negotiation outcomes:

• Home-grown Excel tools

• Excel-based templates & data warehouses

• Business Intelligence system focused on spend analysis and cost management

• Purpose built sourcing platform with integrated market intelligence services

• Cognitive Sourcing platform (predictive insights, integrated market intelligence, AI recommendation engine)

What supply management data sources are managed in systems? Check all that apply.

• Supplier insights and master data information is managed by individual commodity managers

• Supplier insights and related spend information is stored centrally

• Event / Transaction histories are stored centrally

• Performance / Risk KPIs are monitored and shared centrally

• Bill of Materials are maintained at raw material / commodity level

• Recommendations and actions driven by AI

How important is it to have New Product Introduction (NPI) system that tracks risks and opportunities during development as well as connects to sustaining cost systems and processes?

• 1 (low importance)

• 2

• 3

• 4

• 5 (critical for sustaining value)

What technologies solutions does your organization use or plan to implement in the near future?

• Digital/Personal Assistants

• Contract Lifecycle Management

• Sourcing Automation - RFx

About what % of your Direct Materials spend is captured in your Spend Analysis systems or tools?

• We extract data from our ERP to analyze Spend

• 50-75%

• 75-95%

• 95%+

How often are your spend analysis and related sources of insights refreshed?

• Annually (or less frequent)

• Semi-annually

• Quarterly

• Monthly

• Continuously

How are your sources of insights integrated with your sourcing and RFQ systems?

• Manual

• Semi-Automated

• Fully Automated (little or no manual operations)

How do you use external sources of insight?

• Track market indices for only our most strategic categories.

• Track market indices for most or all relevant categories.

• Market indices are analyzed by BI tools and supplemented by third party reports.

• Market indices, analyst reports, and other sources are automatically fed into category-specific applications.

• Category-specific applications are enabled by AI to provide and execute recommendations.

How does your organization track current events in your market?

• Informally through traditional media and publications.

• Some automated alerts monitor our most strategic suppliers

• Automated alerts setup for all suppliers.

• Artificial Intelligence agents monitor alerts to provide and execute recommendations.

What is the number of (direct materials) suppliers are actively managed by the organization?

What percentage of these suppliers actively participate in a sourcing event / competitive bid at least one time per year?

What percentage of total direct materials spend is strategically sourced / managed (vs. the "tail spend")?

• 30 - 50%

• 50 - 75%

• 75 - 90%

• 90%+

What is the frequency of scheduled sourcing events or RFQs per year?

• Primarily ad hoc, not executed on a regular pre-defined schedule

• Primarily Annual events with most suppliers

• Quarterly events for key sub commodities or groups of suppliers.

• Weekly events executed for key sub commodities or suppliers.

• Continuous sourcing with suppliers or sub commodities as needed based on market conditions.