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.