Optimised supply chain design for Highmark Health

grow

Intentional supply chain design during implementation

Our MSP programme optimised Highmark Health's supply chain design and supplier network, exposing a diversity deficit. Collaborating closely, we implemented a strategic process, resulting in a supplier roster that boosted Small Disadvantaged Business (SDB) spend by 25.5% annually. This initiative elevated Highmark Health's overall diversity spend to 47%, enhancing operational efficiency.

Addressing the diversity deficit in the supply base

Highmark Health, a healthcare company, wanted to leverage our supplier network for quick and efficient optimisation of their supply base. Before we implemented a Managed Service Provider (MSP) programme, Highmark had been managing their contingent workforce in-house.

As part of the MSP implementation, Highmark wanted to leverage our vast supplier network of strategic partners for a quick supply chain optimisation. Initially, to avoid business disruption, we migrated all of the Highmark's existing vendors to the programme. It quickly turned out the supply base lacked a strong diversity component.

Our stakeholders at Highmark asked Pontoon to increase their vendor diversity mix to support fulfilling their partners' requirements. 

Creating a custom procurement supplier partnership strategy

Working with Highmark's procurement team, we agreed on the approach for right-sizing the supply base. The ultimate goal was to assemble a roster of high-performing suppliers while increasing its diversity. Highmark was especially interested in adding Small Disadvantaged Businesses (SDB), which are companies owned by socially or economically disadvantaged entrepreneurs.

We conducted a formal RFP, inviting 70 partners that included Highmark's legacy suppliers, Pontoon's diverse and non-diverse partner referrals, as well as local diversity firms recommended by our stakeholders.

27% year-on-year increase in supplier diversity spend

We designed a roster of 38 suppliers, comprised of 14 non-SDB and 24 SDB companies. Our procurement supplier experts suggested grouping suppliers by labour category, tiered as detailed below.

This new strategy ultimately increased the SDB spend by 25,5% in one year. Highmark's overall diversity spend now totals 47%, which amounts to 27% increase year-on-year.

  • IT, project management, business professional
    • Tier 1 comprises a maximum of 6 preferred suppliers, including 4 SDB partners who receive a 24-48 hour lead way on all requisitions.
    • Tier 2 comprised of a maximum of 3 backup suppliers, a mix of diverse and non-diverse partners.
  • Niche-clinical, and admin, clerical, marketing
    • Tier 1 comprises a maximum of 4 preferred suppliers, including 3 SDB partners who receive a 24-48 hour lead way on all requisitions.
    • Tier 2 comprised of a maximum of 3 backup suppliers, a mix of diverse and non-diverse partners.