DCAT Archives: Programs & Events




Managing Supplier Risk -- Financial Stability
Quentin Roach, Sr. Vice President and Chief Procurement Officer, Bristol-Myers Squibb

Presented on Thursday, November 5, 2009 as part of the Senior Sourcing Executive Roundtable at the Hyatt Regency Hotel, New Brunswick, NJ.


BMS is transforming into a biopharma company and is transforming its procurement into a world class sourcing and procurement area, said Roach.

He explained that in light of significant macro events (global financial crisis, credit market tightening, commodity price volatility, and global recession), BMS’s Global Procurement is implementing a supplier/risk monitor financial stability process as part of a world-class risk management model.

The goal is to improve the current process for supplier solvency evaluation in order to mitigate business risk related to financial crisis, as well as other catastrophic events (i.e. making sure the supplier base is not putting the company and its patents at risk due to macro
financial event).

BMS’s risk management framework includes the following major categories: 
    ~ 6-step sourcing process 
    ~ Managing supplier relationships (monitoring) 
    ~ Continuous improvement (cost savings, mitigation plans) 
    ~ Supplier Segmentation (identify critical suppliers and category risk profiles)

Roach emphasized that this process is seen as a competitive advantage for BMS and that the largest part is the people/talent involved in the process.

The risk management model is focused on three goals: 
    ~ To employ a segmentation framework with consistency (comparing substitution difficulty
               versus the importance to business—medical necessity, employee impact,
               business interruption). 
    ~ To develop proactive and scalable quantitative and qualitative measures/metrics, such as
               a supplier solvency scorecard and supplier interview/investigation process. 
    ~ To integrate into process with appropriate frequency. The supplier solvency scorecard is
               completed after downselect, prior to decision, and supplier monitoring is completed
               at least 2x per year or due to an unfavorable news event. Integration of the process
               includes employee training.

Roach concluded by introducing BMS’s Financial Analysis Framework, which provides a balanced framework for evaluating a suppliers solvency. The framework includes the following four categories: operational performance, short term outlook, long term outlook and
external benchmarks.