Supply Chain Management

Suppliers are critical to the success of our business and the approximately 43 million members we serve. Anthem’s Global Supply Chain function facilitates partnerships with hundreds of suppliers, managing over $7 billion of indirect spending in products and services. Anthem partners with suppliers based on their products’ and services’ quality and cost, and on the suppliers’ alignment with our mission and core values.

Icon Conduct Supply Chain Risk Mitigation

The Global Supply Chain function establishes the foundation on which Anthem builds supplier relationships in a consistent and regulation-compliant manner. The department guides Anthem associates and business units in understanding pre- and post-contracting supplier-oversight activities.

Approach

The Anthem Vendor Management Office within the Global Supply Chain function brings best-in-class process discipline to sourcing programs through improved supplier performance management, effective governance and increased supplier accountability. Anthem has a defined supplier segmentation process that categorizes each supplier and assigns a risk ranking, so appropriate levels of due diligence and ongoing oversight can be maintained. Suppliers are segmented based on (i) spending, (ii) value, (iii) operational risk and (iv) strategic risk criteria into four tiers that determine the level of oversight to be applied, with the sharpest focus placed on our tier 1 and 2 suppliers.

Supplier management activities are aligned with foundational capabilities that will enable a best-in-class supplier management structure: strategic governance, operational risk management, contract compliance management, enterprise supplier enablement, supplier diversity and supply chain analytics.

Process

Supplier risk management commences at the time of precontracting due-diligence activity and continues through the life of the engagement. At any time, starting with requests for proposals, Anthem may choose not to do business with a vendor that poses a risk. This is complemented by highly specialized “second line of defense” functions spread across multiple risk domains, including information security, regulatory compliance, delegation oversight, business continuity / disaster recovery and controls assurance.

Icon Sustainable Supply Chain Sustainability and Responsibility

Anthem is committed to upholding environmental, social and governance (ESG) criteria across our value chain, which includes our suppliers. In addition to considering each supplier’s ESG standards as an important component of its overall profile, we are committed to assessing our critical suppliers’ alignment with Anthem’s mission and core values. Our robust Supplier Code of Conduct—which addresses topics such as human and labor rights, anticorruption policies, workplace safety standards and responsible paper guidelines—is standard in supplier contracts; suppliers are required to acknowledge and attest to it on a regular basis. The code sets expectations, in alignment with Anthem’s values, for how our suppliers do business. To learn more about Anthem’s stance on human rights, visit the Human Rights section of this site.

In addition, as part of our enterprise environmental goals, we are committed to engaging with strategic suppliers on setting their own scope 1 and 2 science-based greenhouse-gas-emission reduction targets by 2023.

Icon Supplier Diversity Supplier Diversity

It is important to Anthem that we partner with suppliers who represent the diversity of the communities and individuals we serve. In 2020, Anthem’s Supplier Diversity program contributed by spending nearly $700 million with diverse-owned suppliers.

Partnerships

Through our supplier diversity program, we develop strong community partnerships to identify, nurture and expand our supply base and to improve the economic health of our communities. We sponsor and work with organizations such as the Mid-States Minority Supplier Development Council (MSDC): our financial support has enabled the Mid-States MSDC to certify and recertify approximately 2,000 people with master of business education degrees over the past several years, and has allowed us to provide continuing education to people seeking such degrees.

Implementation

Anthem strives to include diverse suppliers in every bidding opportunity. We are dedicated to working whenever possible with businesses owned by minorities, women, veterans, service-disabled veterans, members of the LGBTQ community and individuals with disabilities.

Pillars of the program include:

  • Providing development, education, and skills training for diverse suppliers by leveraging our close partnerships with supplier diversity advocacy groups;
  • Creating Anthem commodity champions, who are committed to the inclusion of diverse suppliers in the business units they represent;
  • Accelerating payment terms for small diverse suppliers with less than $1 million in annual Anthem invoicing; and
  • Increasing supplier inclusion and diversity awareness among internal and external stakeholders.