Smith+Nephew: Reinventing procurement as a strategic capability to deliver value across the organization
Explore Smith+Nephew’s journey with SAP
Guided by its “Life Unlimited” mantra, global healthcare leader Smith+Nephew reshaped its procurement operations on SAP Ariba solutions as part of an ambitious sustainability strategy. With standardized procurement processes, it gained visibility and control of spend globally and improved spend compliance with guided buying.
| Industry | Region | Company Size | Featured Partners |
| Healthcare | Watford, United Kingdom | ~19,000 employees | SapienceS2P Ltd and Cognizant |
increase in spend capture in 2021 and 2022.
of requisitions right first time.
first-pass invoice-matching rate.
reduction in new-supplier onboarding requests.
faster supplier onboarding cycle time.
rise in employee satisfaction.
Vice President – Source to Pay, Smith+Nephew
Taking a strategic path to efficient sourcing and procurement
Dedicated to making a difference in patients’ lives, Smith+Nephew has a long history of innovation in the medical fields of orthopedics, sports medicine, and advanced wound management.
For over 165 years, Smith+Nephew has been improving lives with its innovative design and manufacture of a portfolio of differentiated products and services focused on the repair, regeneration, and replacement of soft and hard tissue. Guided by its purpose of “Life Unlimited” and operating in more than 100 countries across the globe, the company supports healthcare professionals to help their patients regain health and mobility.
As a global healthcare leader with 2022 revenues of US$5.4 billion, Smith+Nephew set an ambitious sustainability strategy aligned with the United Nations Sustainable Development Goals. An important part of this strategy, which is committed to leaving a positive imprint on the world, focuses on meeting heightened customer expectations for sustainability across the company’s supply chains. For its procurement operations, this means only purchasing goods from companies that align with its high standards on safeguarding people and the environment, as well as meeting the complex regulatory requirements for tracking these transactions.
However, with Smith+Nephew’s fragmented procurement software landscape limiting its visibility into third-party spend, it was difficult for the company to deliver robust category strategies to control spend. Its people struggled to use the correct system for specific purchases, making noncompliant spend an ongoing challenge. At the same time, inconsistent approaches to onboarding suppliers were used across different geographies, often leaving suppliers and employees frustrated and not knowing which steps to take.
To simplify purchasing processes in line with its stated ambitions, Smith+Nephew sought a new approach.
Vice President – Source to Pay, Smith+Nephew
Adopting next-generation spend management capabilities
Intent on simplifying the purchasing experience for its people and enforcing compliant spending across its supply base, Smith+Nephew resolved to roll out a standardized global source-to-procure process using SAP Ariba solutions, as illustrated in the figure below.
The company needed visibility into company-wide spend for the ability to analyze data to understand key trends. It also wanted to streamline the user experience by offering a consistent and automated purchasing workflow that was free from manual input and associated errors. Likewise, it was important for the healthcare company to automate request-for-proposal processes and streamline its inconsistent supplier onboarding practices across its business units. In Smith+Nephew’s vision for its revamped procurement operations, there was no room for numerous invoicing exceptions necessitating emergency payments.
For the rollout of SAP Ariba solutions, Smith+Nephew joined forces with SAP silver partner SapienceS2P Ltd and global strategic service partner Cognizant Technology Solutions. To maintain a 360-degree view of suppliers, including their sustainability credentials, it implemented the SAP Ariba Supplier Lifecycle and Performance solution. This solution helps foster stronger supplier relationships and keeps track of supplier performance. And as suppliers’ sustainability ratings become a key requirement for sourcing decisions, this can help Smith+Nephew keep purchases aligned with the organization’s sustainability objectives.
Likewise, to steer employees along a compliant path for their purchases, the company adopted the guided buying capability. Employees can use this tool to access multiple channels, such as onetime or emergency payments, Amazon Business, and Candex.
Vice President – Source to Pay, Smith+Nephew
Shaping future purchasing policies with data-driven insights
Since Smith+Nephew unified global procurement processes with SAP Ariba solutions, spend captured through the software increased by US$400 million throughout 2021 and 2022, representing an overall increase of around 70%.
In terms of visibility and control, the procurement team can now analyze spend and identify savings opportunities across the business. In addition, there’s improved compliance with procurement policies, thanks to a simplified user experience, guided buying, and catalog-based purchasing. This is supported by the addition of digital adoption tool WalkMe to help infrequent users get from A to B. This intuitive on-demand guidance helps users get things right the first time. The success of this approach is evident in the results: more than 90% first-pass approvals of requisitions and more than 80% first passes in automatically matched invoices through accounts payable.
Meanwhile, supplier onboarding requests have dropped by 67%, and the time to onboard suppliers has reduced by half. Furthermore, stronger collaboration with suppliers through SAP Ariba Supplier Lifecycle and Performance is helping the healthcare company run agile supply chain operations in line with its corporate social responsibility commitments. For suppliers, there are now consistent and integrated processes and timely payments.
In addition, a modern and intuitive user experience now allows employees to focus on their work rather than being consumed with purchasing processes. This improved user experience has led to a 35% increase in employee satisfaction ratings. With in-depth insights around company-wide spend, Smith+Nephew’s procurement professionals can take a more strategic role in shaping future purchasing policies.
Vice President – Source to Pay, Smith+Nephew
Gaining process intelligence to guide procure-to-pay efficiencies
As Smith+Nephew continues its procurement transformation journey, the company has plans to roll out SAP Ariba solutions to its global distribution center in Singapore and its commercial businesses in China. The organization also has plans to explore dynamic discounting, supply chain finance, and virtual purchasing card initiatives in the future.
Another part of Smith+Nephew’s procurement transformation is centered on leveraging more data insights through collaborative process mining. To further develop more procure-to-pay efficiencies, Smith+Nephew wants to take advantage of process mining to gain rich insights into process deviations and identify opportunities to mitigate them.
Featured partners
SAP silver partner SapienceS2P Ltd helps customers meet today’s source-to-pay and procure-to-pay needs. Offering expertise honed over 20 years of delivering stable procurement pathways, the company specializes in deploying cloud-based procurement and ERP solutions from SAP. Its Sapience Satori chatbot was piloted first in Smith+Nephew and was built to help users get information quickly and easily on their requisitions, purchase orders, and invoices.
SAP global strategic service partner Cognizant engineers modern businesses. It helps customers modernize technology, reimagine processes, and transform experiences so they can anticipate and act instantly in a fast-changing world. The company offers solution design, development, implementation, and integration guidance for SAP solutions. Cognizant was involved as a system integrator to help ensure that Smith+Nephew’s business requirements were translated into a solution design through fit-gap workshops, integration with SAP ERP and other applications in the ecosystem, testing, and deployment.