Global Procurement & Third Party Management (GP&TPM) is Cigna's strategic sourcing, purchasing, and supplier relationship management organization. Our organization supports the global enterprise's supplier activity, including identification of suppliers, conducting the bidding processes, negotiating agreements, and managing supplier relationships.
Our Supply Chain
In 2018, Cigna’s GP&TPM team managed more than $2.8 billion in goods and services provided by over 5,000 suppliers globally. Cigna's suppliers provide goods and services that support information technology, operations activities, and internal corporate functions.
Cigna Global Procurement & Third Party Management functions coordinate the sourcing, contracting, and purchasing activities for goods and services, as well as, internal and external relationship management, with a focus on providing best-in-class procurement practices based on four guiding principles:
- Abide by the highest standards of ethical business practices in supplier selection, negotiations, determination of contract awards, and the administration of procurement activities.
- Conduct our business in a manner that demonstrates fairness to our shareholders, our customers, our community, and our suppliers.
- Customer and Market Focus
- Anticipate and meet the expectations and requirements of our customers.
- Understand the trends and market opportunities that affect our business and utilize this understanding to develop and implement strategies that effectively deliver value to our stakeholders.
- Team Collaboration
- Promote an environment that fosters collaborative behavior and values diversity among all key stakeholders resulting in trust, respect, mutual commitment, and thought leadership.
- Value many perspectives and incorporate learnings from others to enhance our own understanding and appreciation of differences in style, opinions, or approaches to situations.
- Enterprise Thinking
- Develop sourcing strategies that harness Cigna's cross-enterprise expertise in order to effectively utilize our knowledge and analytics while properly aligning our objectives.
- Strategically leverage our collective strengths, expertise, and best practices in order to optimize the value delivered to Cigna's individual businesses worldwide.
Additionally, in 2015, Cigna became the first U.S. health insurance company to sign on to the United Nations Global Compact (the “UNGC” or the “Compact”). As a signatory of the UNGC, we are committed to living out the Compact’s 10 principles in our everyday operations and seek to partner with organizations that are guided by similar principals.
Supply Chain Responsibility
Cigna's policy is to solicit competitive bids when purchasing goods and services. In order to be considered a potential supplier, a company must comply with Cigna's Policy Guidelines, including our Supplier Code of Ethics.
As part of our Supplier Code, we explicitly prohibit the use of child or forced labor, and request that our suppliers demonstrate ethics, compliance and integrity in the following three pillars:
All suppliers are expected to read and comply with the Supplier Code. Suppliers are directed to this information through our supplier registration process.
We utilize a third-party risk management software platform to proactively monitor supply chain risks. Our supplier risk assessment evaluates 17 dimensions of risk, including risks related to financial solvency, privacy, and information protection. We conduct executive business reviews and utilize an “early warning system,” which helps us to identify and address emerging risks among suppliers. Based on the supplier risk assessment results, select suppliers are then audited to review their internal controls over financial reporting, business operations, information technology, and compliance will obligations under their contractual agreement(s) with Cigna. Any audit findings are further reviewed. We then work with suppliers to develop and implement corrective action plans as warranted.
Promoting Diversity in our Supply Chain
Cigna has a long history or promoting supplier diversity dating back to the 1970s, and each year we aim to identify new and valued ways to expand contributions within local markets, and deepen engagement with and support of small and diverse suppliers.
Supplier diversity expands and enhances our corporate relationships and experiences and contributes to our ability to better understand and serve our broad spectrum of customers. Cigna's program is designed to engage the very best suppliers, including those who share our commitment to integrity, quality, and efficiency and continue to support Cigna's purchasing needs.
The success of minority, women, veteran, and LGBTQ+ owned business, and other under–represented suppliers, adds to Cigna's success and to the communities we serve. Often, these suppliers can provide the best combination of total cost, quality, and service, which contributes to healthy competition and a level playing field for all potential and existing suppliers. Cigna's supplier diversity work further supports our Company's diversity goals and objectives. Cigna is also a long-standing corporate member of various development organizations to include the National Minority Supplier Development Council (NMSDC), the Women's Business Enterprise National Council (WBENC), the National Gay and Lesbian Chamber of Commerce (NGLCC), the US Business Leadership Network (USBLN) , and recently, the National Veteran Business Development Council (NVBDC); engagements with these councils provides a direct link between corporate America and diverse-owned businesses.
Our annual economic impact statistics for 2018 are:
- $186 million in purchases from small and diverse suppliers
- $473 million in economic contributions delivered through 3 channels: Direct, Indirect, and Induced
- 1,708 jobs supported at small and diverse suppliers
- $84 million in earnings through jobs with small and diverse suppliers
In addition, Cigna continues to work with our high priority suppliers, also referred to as our Tier 1 suppliers, to encourage them to embrace our values and goals of including diverse suppliers in their supply chain. By encouraging our Tier 1 suppliers to do business with diverse suppliers and share this information with Cigna, we reflect a portion of this spend in our Tier 2 program. A second-tier supplier is a supplier that invoices the first-tier supplier for goods and services rendered.
Beginning in 2019, we will work toward a goal to increase supplier diversity spend (Tier 1 and Tier 2) to 13-15% by 2021. Our 2018 baseline supplier diversity spend is 11% and reaching this goal will increase supplier diversity spend by at least 30%.
In 2018, we graduated our inaugural class of the Cigna Supplier Mentor Protégé Program, a program we began in 2016 to proactively engage with businesses in the communities in which we live and work. The inaugural class was comprised of 5 protégé companies from different lines of business and different diversity classifications. The program consisted of monthly one-on-one mentoring with a dedicated mentor and 6 on-site quarterly forums to support strategic leadership development covering a diverse range of topics including financial analysis, marketing, employee development, social responsibility, environmental sustainability, and supply chain management. In 2019, we will work to integrate Express Scripts suppliers into the next cohort of program members.
Challenges and Opportunities
We are proud of the accomplishments achieved to date but acknowledge there is more work to be done to support inclusive growth within our supply chain. We are focused on increasing awareness throughout the organization, and advancing national, local, and regional diverse partnerships–building upon baseline metrics from our economic impact analysis. In 2019, we are committed to continuing our 2018 undertaking to increase our diverse spend within 4 priority U.S. Commercial markets through further integration of the inclusion of diverse suppliers and ultimately the selection of a more robust and diverse supplier base.
1 A Handbook for Small Business Liaison Officers. U.S. Small Business Administration. June 2010. https://www.sba.gov/sites/default/files/Small_Business_Liaison_Officer_ (SBLO)_Handbook_6_2010.pdf.
Disclaimer: The report covers calendar year 2018 and unless otherwise noted, excludes the combination with Express Scripts, which closed on December 20, 2018.