5-5-5 Program
The 5-5-5 Program was developed for a large health care provider that set goals for a percentage of savings each year from their supply base. A difference between this and other RI programs is the focus on using Adversarial Techniques. Most RI Programs focus on Collaborative Techniques.
Low-level savings are the easiest 5% to achieve since a simple Supply Base Rationalization almost always reaches 5% savings, as evidenced by published savings at Honda and Deere. This level is an Adversarial Relationship approach.
Mid-level savings are also about 5% Savings come from relatively simple capability improvements based on sharing and implementing best practices between your company and your collaborative relationships, hence a Collaborative Level Relationship approach.
High-level savings are delivered from projects that require substantial change such as creating a supplier cluster. Some companies report savings upwards of 25% with high-level improvements. This is an Alliance Level Relationship approach.
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