Customers
OVERVIEW
For 100 years, H-E-B has been an innovative retailer. Known for its fresh food, quality products convenient services, H-E-B strives to provide the best customer experience at the lowest prices
Based in San Antonio, H-E-B employs more than 56,000 Partners (employees) and serves million customers in more than 150 communities with more than 300 stores throughout Texas and Mexico
To support its Partners, H-E-B provides an attractive benefits package that offers a choice of four medical plans. Sixteen suppliers, managed by 31 contracts, provide a variety of services that make up the total H-E-B benefits package.
THE CHALLENGE
The impact of rising health care cost is significant in the retail food industry. Even the smallest increase in a major expense such as employee benefits can have a tremendous impact on the business.
When H-E-B's Long Term Disability (LTD) program came up for renewal, the rates were significantly higher than expected. After analyzing available options, H-E-B decided to take the LTD plan to market.
H-E-B sought to manage the entire benefits procurement process - from building the RFP and distributing it to prospective suppliers, through to analyzing the proposals and selecting the most appropriate supplier. In the past, H-E-B's procurement process had typically involved time consuming, manual processes that were inherently disjointed. H-E-B recognized a better solution and turned to HighRoads to help streamline and automate the procurement process while delivering cost savings and transparency throughout the process.
THE SOLUTION: HIGHROADS
HighRoads provided H-E-B with an end-to-end solution to manage the entire procurement process and select the most beneficial LTD plan for its Partners.
During the LTD procurement process, HighRoads was used to accept bids from suppliers for two plan options: the current option and a buy-up option. Pricing was required for both hourly and salaried workers. Additionally, suppliers were further evaluated by answering a questionnaire and managed using the HighRoads solution. After collecting each supplier's final proposal, HighRoads consolidated the proposals for analysis by H-E-B and their consultant.
With HighRoads , H-E-B was able to streamline the procurement process by utilizing:
- End-to-end management of the procurement process - HighRoads was used to build an RFP event, send the RFPs to suppliers, collect the proposals, handle re-bids and alternate designs from suppliers, and consolidate all responses for analysis.
- Reverse Auction capability - The reverse auction capability created a competitive environment proven to produce lower plan cost than a traditional RFP process. By allowing suppliers to submit proposals then instantly see where they ranked against other suppliers based on their bids, suppliers were more likely to submit more competitive bids to improve their ranking. Suppliers had the ability to submit new bids up to the closing of the event.
- Reporting capabilities - HighRoads enabled a savings in time and cost by providing H-E-B and their consultant with reports on the bids in a standardized format for easier comparison between the proposals. The consultant took this information, applied their market expertise, and then made a recommendation to H-E-B. Because HighRoads automated the consolidation process, H-E-B was able to complete this process 50% faster than they would have with a more traditional process.
- Transparency and audit trail - To ensure fairness during the bidding and supplier selection process, HighRoads ensured transparency by providing all suppliers with access to the same information and bidding process. Any objections to the bidding process or the awarding of the contract could be reviewed and resolved using the automatically created audit trail.
THE RESULTS
By using HighRoads , H-E-B was able to efficiently automate and streamline the procurement process and realize the cost savings they had hoped for when putting their LTD program out to bid. As a result of the implementation of HighRoads , H-E-B's Long Term Disability procurement process generated:
- An average of 2.5 bids from seven participating suppliers
- A reduction in fees of 4.5% (from initial bid to final bid)
- An estimated reduction of 4.5% in fees from the incumbent's proposed renewal rate
- A significant reduction in time and cost required to evaluate proposals
Currently, H-E-B uses HighRoads in all areas of their benefits management process, including procurement, information management and intelligence, and supplier management. H-E-B's continued use of HighRoads has helped generate significant cost savings. In 2005, H-E-B experienced a 3.7% decrease in health care benefits costs versus a national trend of a 9.2% increase. In 2004, H-E-B experienced a health care cost increase of only 6.0% versus a national average increase of 11.2%. H-E-B also realized a savings of 12% in administrative fees in 2004 as HighRoads helped streamline the benefits management process.