In 2022, Fresenius Medical Care (FME), a €19.4bn-revenue global healthcare company, was facing market headwinds – volatile and inflationary conditions, grim earnings outlook, and a sliding stock price. Procurement was fragmented into seven teams with reporting lines into 70+ entities for 450+ professionals, including 170 procurement resources reporting into non-Procurement functions. Additionally, the function had varying capabilities, a limited ability to leverage scale, and was struggling to achieve its savings target of €408m by 2025, with only €70m in the 2022 savings pipeline. These gaps hindered sustainable value creation, imperilling business performance.

To tackle this, FME procurement launched the ONE Procurement Transformation to enhance functional capabilities, deliver a step-change in value creation and become a strategic partner and advisor to the management board and businesses.

FME consolidated disparate teams under new leadership to leverage skills and scale and focus on strategic activities. Today, 49% of its resources are dedicated to strategic and governance activities, up from 29% in 2022. Additionally, the team streamlined all transactional and operational activities to three newly established global business service centres, accounting for 25% capacity, to enhance efficiency.

This new global procurement team has employed an innovative problem-solving approach, focusing on speed, nontraditional ideas and cross-functional collaboration, to achieve €233m savings in 2023 and develop a cumulative pipeline of over €500m by 2025.

This transformation cements FME Procurement as a strategic business partner and solution provider that can advance innovation and drive sustainable value creation to enable FME’s mission to its patients.