supplier relationship management

Two Senior Procurement Executives Weigh In On The Best Way To Deal With Inflation

procurement inflation

One of the significant advantages of the Sourcing Industry Group (SIG) is that members have unparalleled access to industry insights and expertise through our vast and diverse community of practitioners and thought leaders.

Recently we conducted interviews with two senior procurement executives regarding their innovatively practical approach to dealing with inflation and its impact on supply chains.

In the first instance, we talked with Tony Abate - Senior Vice President & Global Chief Procurement Officer at Cigna Express Scripts.

When Cigna closed its $67 billion acquisition of Express Scripts in December 2018 to become what the media called a “$140 billion revenue healthcare colossus,” Tony’s responsibilities expanded considerably.

Responsible for “transforming and integrating two procurement departments into a global, world-class international team, he is accountable for the CIGNA taxonomy research, analysis, and development, including identifying 8000 suppliers with an annual spend of $4.5 billion.

Our second executive is Michael Koontz. Michael is the VP Strategic Sourcing & Business Leader for ATD Sourcing Solutions, whose unique approach to battling inflation we will discuss in a follow-up post.

Creeping Into Supply Chains

Shortly before his interview with SIG, Tony gave a speech to 1500 employees at Cigna on inflation and its impact on supply chains.

Dawn Tiura, President and CEO, SIG

The Inflated Supply Chain: How To Navigate The Complexity Of Doing Business During A Period Of Rising Inflation

Supply chain Business During Inflation

A timeless saying is that "life is 10 percent what happens to you, and 90 percent how you react to it."

I was reminded of these words when I recently read the PBS News Hour article How the supply chain caused current inflation, and why it might be here to stay.

According to reports, the 6.2 percent increase in prices over last year was unexpected and, therefore, a shocking turn of events to many experts. Even more troubling is that there is a growing belief that higher consumer prices will become the "new normal." In short, while the rate of inflation may nominally fluctuate over the coming months, its fastest rate of increase in "more than three decades" is a trend that will likely continue in the coming years.

I intend to understand the "why" of what is happening and highlight the consequences of the current crisis - including the means and tools at your disposal to deal with it.

Supply Chain Mess

While there is no single reason for the inflation we are experiencing today, it seems that the catch-all reason given by experts is that our supply chains are a mess.

Starting with the "severe shortages of goods and labor in supply chains," pundits point to a dramatic increase in people buying online due to the pandemic as an exacerbating factor.

For example, industry projections that orders would hit 4.7 million packages a day during this recent holiday go well "beyond what the system can possibly absorb or deliver." However, that is just one part of the story, which brings us back to my opening comments about our reaction.

When The Chips Are Down

The strained relationships between buyers and sellers due to inflation are making headlines around the globe.

Dawn Tiura, President and CEO, SIG

Making Supplier Relationship Management Work

supplier management

SIG University Certified Supplier Management Professional (CSMP) program graduate Indre Ciuberke breaks down the importance of the Supplier Relationship Management (SRM) Framework and the four quadrants of SRM communication that adjust the ways of working with suppliers. 


When you think about the Supplier Relationship Management (SRM) Framework, it’s not just walking and talking with your Organization partners and having a relationship with them. From my perspective, SRM is based on relationships, however, stressing the communication and information sharing process in the particular relationship. Usually, SRM has corporate attributes such as ensuring the governance, agenda tracking and managing risks associated with the services or products that the supplier provides to the organization.

Every team is focused on bringing value to the organization. SRM can contribute to this is to push the streamlined service delivery by becoming a core internal team in the organization's structure for outsourced service management.

Supplier Relationship Management Team Framework

Supplier Relationship Management Team Framework

I have tried to describe the basic SRM as an internal core team framework in the picture above. The idea is based on communication and information flows:  

Indre Ciuberke, Procurement Manager, Moody’s

Why Procurement Should Adopt Design Thinking Principles

design thinking for procurement

Empathy is the way to build trust. And the strongest, most productive relationships are built on trust. It’s certainly that way in our personal lives. So it stands to reason that it’s the same with professional relationships. Yet, too often, empathy is left out of the equation when identifying and implementing solutions in the business world in general and in procurement specifically.

That’s not good because, as we all know, strong stakeholder and supplier relationships are the bedrock of a successful Procurement Ecosystem. That’s why the more I’ve learned about the concept of Design Thinking the more I am convinced it can be a game-changer for procurement.

Design Thinking Isn’t a Strategy, It’s a Mindset

What is Design Thinking? Well, it’s not a new concept. It’s been around since at least the 18th century. But its wisdom is just now being embraced by procurement teams, so it feels new.

Basically, Design Thinking involves a different mindset for how to define and solve problems and it begins with empathy for the end-user. The process starts with really listening to and understanding the biggest challenges and pain points for your stakeholders. The idea of putting yourself in their shoes, so you can be sure you are addressing their true needs and not what you think they need.

Design Thinking is a highly creative and iterative process that encourages a lot of experimenting and prototyping. The goal is to fail fast to learn even faster. When you put together a prototype and test it out, your end-users provide feedback for what works and what doesn’t in an iterative feedback loop. The end result, in theory, yields greater stakeholder alignment, better adoption rates, and demonstrates procurement’s strategic value to the business.

Greg Anderson, SVP, Sales North America, WNS Denali

Finding Cost Savings in a Distressed Economy

negotiating cost savings in a covid-19 economy

SIG University Certified Sourcing Professional (CSP) program graduate Angelica Gardner discusses how CSP modules on internal spend analysis and contract negotiation planning improved her approach to identifying cost efficiencies as a procurement buyer.


As everyone is aware, the COVID-19 pandemic has affected a large portion of the economy’s growth ability, especially in the automotive industry, with declining sales of more than 40%. Companies are having to develop strategic ways to cut costs and provide cost-saving solutions. As a buyer in the manufacturing plant, my responsibility is to identify these cost efficiencies.

To accomplish this task, SIG University's CSP program helped me recognize two areas to improve: internal spend analysis and contract negotiation planning. These areas are complementary skills that have helped me improve my approach these types of situations in the future as a procurement buyer.

INTERNAL SPEND ANALYSIS

As a new procurement agent, having followed industry market trends, company earnings and announcing changes within the organization has given me a leg up in my negotiation strategies. Assessing the environment is vital to understanding business requirements, the company’s vision and our department’s functional goals during this critical time.

In one particular situation, management did not agree with a supplier’s new budget proposal and wanted to reduce cost by an overall savings of $86,000. The lesson teaches us to gather as much data required and perform a spend analysis to determine leverage. After completing a spend analysis from the previous year, we discovered the total spend was consistent with what was done in the past.

Angelica Gardner, Procurement Buyer, Honda Manufacturing

Aligning Risk Management Tools to Protect Customer Data

SIG University's Certified Third Party Risk Management Professional Program helps protect against company data breaches

SIG University Certified Third Party Risk Management Professional (C3PRMP) program graduate Cindy Lingerfelt works at Blue Cross Blue Shield of Florida. She shares what she’s learned about third-party risk management and how her small team plans to build a stronger risk culture.

In the C3PRMP program, students focus on best and emerging practices to identify, assess, manage and control third-party risk throughout the lifecycle of relationships, and learn how to align risk fundamentals and frameworks with risk culture to develop the essential tools and controls for effective governance.


I work for Blue Cross Blue Shield of Florida on the Procurement team. My sub-team, Supplier Management, is small and we wear many hats. We were the first in our organization to implement some standardization for how critical suppliers were managed by developing a segmentation questionnaire to tier our suppliers and worked with business owners to get all Tier 1 suppliers on performance scorecards. Our role was to provide standard formatted scorecards with a library of the most common KPIs, stationary, QBR templates and more. 

Due to an incident with a supplier, the board made a directive that supplier risk should have a more explicit focus. A new team called Enterprise Risk Management was formed within Corporate Affairs/Internal Audit to address supplier risk and closely partner with Procurement on new suppliers and manage risk with our current supplier base.

Cindy Lingerfelt, C3PRMP, Sourcing Specialist, Florida Blue

The Innovative CPO’s Road Map

What CPOs need to focus on to be successful

Procurement has evolved to become more strategic and collaborative and has moved from an isolated, back-office function to a boardroom partner. While the procurement function must continue to drive hard savings, manage suppliers and mitigate risk, it must also pivot to look for opportunities to deliver future savings and innovation.  

“Procurement is at an inflection point,” said Dr. Marcell Vollmer in an interview with SIG CEO Dawn Tiura. “Procurement needs to transform into a value-added function focusing on strategic tasks.” How can procurement teams do this?  

Based on interviews with today’s leading procurement executives, innovative suppliers and academic research on the procurement function, five notable areas stand out in which procurement can drive innovation in areas critical to the sourcing industry.  

INVEST IN THE RIGHT TALENT

For all the great advancements that technology brings, it requires people to manage the technology. Oxford Economics’ survey among procurement executives and practitioners found that the top three investment priorities include new talent recruitment, training/upskilling programs and procurement/supply-chain technology.  

Oxford Economics Survey

Stacy Mendoza, Digital Marketing Manager