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Healthcare Giant Transforms Procurement With SAP Ariba

As a customer-driven healthcare leader, Stryker Corporation has a 38-year track record of growth, fueled by both organic growth and mergers and acquisitions. With 33,000 employees worldwide and more than $12.4 billion in annual sales, the company turned to SAP Ariba to transform its relationships with suppliers.

“We looked on this as a business transformation project,” said Kelly Ellis, director of Process Lead, Direct Materials at Stryker Corporation. “We wanted to reduce approximately 34 ERP systems worldwide to just a couple of SAP systems. We had to change ourselves to work the way the software does. Now we’ll have one common platform to interact with suppliers and customers worldwide.”

Ellis shared her company’s transformation journey at the recent SAP Ariba Live event, spotlighting how the resultant cost transformation helped Stryker manage internal and external suppliers in a smarter, more efficient way. The project combined SAP Ariba, SAP S/4HANA, and SAP Integrated Business Planning.

Expected Cost-Savings, Efficiencies from One Global Process

The new system will give procurement a window into the entire supply chain process, better connecting supply to demand. Ellis anticipated major benefits for the company at large, as well as procurement employees. Buyers will spend less time managing invoices or understanding which suppliers are getting paid

“Getting our supply planning and demand planning processes integrated was important so everyone upstream knows what they can expect from a supplier, based on what’s actually been submitted,” said Ellis. “We needed one supply process integrated between our supply base, planning team, and procurement. It will be our one go-to global process.”

She said teams were most excited about moving away from the multiple, manual spreadsheets in their previous systems. “This becomes our one-stop shop for how we will drive supply chain efficiencies. We expect tons of savings from buyers not having to call the supplier for purchase order confirmation. The buying team is excited because they see it as something that makes their life easier and their job more fun. They can do cooler things than setting up purchase orders.”

Three Lessons Learned

Ellis credited project success to leadership support, strong collaboration between IT and business managers, and change management efforts.

“We’ve had great executive alignment for the program,” she said. “Within our team, managers have all come from the business so we know how everything operates. As things come up, we can bring it to them and they get back to us quickly.”

Lindsay Gray, manager and process implementation lead for Global ERP at Stryker, added that change management was equally important: “We acknowledged that it’s not going to always be easy. There will be growing pains. Changing for the sake of enabling growth can be painful. There’s broad acceptance within the business that we’re doing this for the right reasons. It will transform how we do business, and we’re here to support the business.”

Intelligent Spend Management

Stryker’s experience reflected what I’d heard just an hour before during the SAP Ariba Live keynote. Darren Koch, chief product officer at SAP Ariba, said that after speaking with customers, he’s more convinced than ever the company has the right strategy.

“Bringing together an end-to-end platform to deliver intelligent spend management is the right place to start,” said Koch. “Using that place to get to a vision of autonomous spend, bringing all the data in one spot so we can apply the technology and propel value in ways we haven’t seen before… we’re serving three stakeholders to deliver this vision: the end-user, purchasing companies, and suppliers. The friction-free process is core to great consumer and enterprise experience.”

Follow me: @smgaler

Source: SAP ERP News

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