McKesson - Transforming Supply Chain Operations Through CLM

Overview

McKesson Medical-Surgical, a major distributor of healthcare supplies and equipment, embarked on a transformative journey to enhance its distribution process. Recognizing the need for greater operational efficiency, they initiated a phased approach to their Contract Lifecycle Management (CLM) initiative and focused on continuous improvement.

Business Challenge

McKesson recognized that to achieve greater efficiency and enhance its market presence, it needed a fundamental transformation in its vendor interactions and overall operational approach. The company embarked on a high-level initiative, discarding outdated CLM spreadsheets, applications, and manual processes to embrace cutting-edge CLM technology. This shift was pivotal in facilitating the onboarding of new vendors and products, thereby enhancing the value delivered to customers.

In a departure from conventional practices, McKesson chose not to engage a large, established Consulting Firm. Instead, the company believed that a more effective approach would be to collaborate with boutique firms to catalyze its CLM digital innovation initiative. Their high-level staffing and talent strategy centered around cultivating an "internal versatilist" team, with Mainspring serving as the preferred boutique CLM firm.

Solution Delivered

Teaming up with Mainspring, McKesson embarked on a journey to design, configure, and implement a CLM solution tailored to support a process-based approach for Buy-side contracts. This encompassed the entire contract lifecycle, from initial request through authoring, redlining, approvals, to execution.

A key component of this approach was to have a CLM Business Analyst immerse themselves as a Contract Facilitator, gaining a hands-on understanding of the new CLM application. This approach prioritized the user experience by facilitating iterative, collaborative design review sessions, ensuring that usability aspects were thoroughly addressed and that user adoption risks were mitigated. Real-time user feedback was actively solicited and incorporated into ongoing enhancements and iterative releases of the CLM application. Remarkably, this transformation also involved the migration of over 25,000 contracts

Key Results

McKesson's vision to become a proactive business partner resonated with healthcare providers, reducing supply chain costs and enhancing reliability. By digitizing its supply chain, starting with a CLM project, McKesson transformed its interactions with high-level executives at their customers. The company's commitment to innovation complemented its traditional approaches, resulting in streamlined contracting mechanisms with both vendors and customers, differentiating McKesson in the eyes of its clientele. Importantly, this is just the initial phase of McKesson's journey, as the company continues to expand CLM functionality and introduce innovative tools across the organization.

In summary, McKesson's strategic embrace of CLM technology and its partnership with Mainspring have positioned the company as a pioneer in driving operational efficiencies within its supply chain, ultimately benefiting its customers and reinforcing its leadership in the healthcare distribution industry.