$500M - $1B
$1B - $2B
$2B - $5B
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.
1 (low importance)
5 (critical to success)
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.
Exciting & Innovative
1-2 times per year
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.
1 (low readiness, resistant to change)
5 (high readiness, rapidly adopting)
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)
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
1 (low importance)
5 (critical for sustaining value)
Contract Lifecycle Management
Sourcing Automation - RFx
We extract data from our ERP to analyze Spend
Annually (or less frequent)
Fully Automated (little or no manual operations)
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.
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.
30 - 50%
50 - 75%
75 - 90%
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.
30 - 50%
50 - 75%
75 - 90%