GOVERNANCE & PROCESS
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
104
PROCESS OWNERSHIP
Figure 3.0. The proportion of companies with a formal SRM process owner in place – all respondents
4% DON’T KNOW
The first thing to consider when creating governance and process is ownership. Who will be accountable and responsible for building process excellence? We have seen that for more than 70% of respondents this is owned by procurement. The proportion of companies with a formal SRM process owner in place this year is the same as last, at 64% overall. The figure amongst leaders, fast followers and followers is closer to 80%, indicating the link between more effective SRM and single point accountability for process ownership.
32% NO
64% YES
© 2014 State of Flux
SEGMENTATION
CATEGORY REVIEW
SUPPLIER REVIEW
Some form of supplier segmentation is now carried out by over 80% of companies seeking to establish SRM. However, the approaches adopted, the frequency and the criteria applied still vary considerably. In the vast majority of cases, spend and risk are the dominant criteria. This is most often considered by looking at the subject in a number of ways. The responses reveal that generally two views of spend are considered as part of the segmentation process: across category and with the specific supplier. On occasion, spend is also rolled into total cost of ownership, but this rare. Risk is more often viewed in three ways: inherent risk related to the category; risk related to the failure of specific products and services; and risk related to a specific supplier, including the level of dependency. This chart clearly shows these spend and risk related considerations clustered at the top, representing feedback from over 50% of respondents. The emergence of additional segmentation criteria that focus more on supplier potential and behaviours has to some degree stalled at between 20 and 30% of companies using them for supplier segmentation.
HIGH
STRATEGIC
PREFERRED
TRANSACTIONAL
LOW L
LOW RISK CATEGORIES
MEDIUM RISK CATEGORIES
HIGH RISK CATEGORIES
INHERENT CATEGORY RISK IMPACT OF FAILURE REPUTATIONAL RISK MARKET DYNAMICS, ETC.
POTENTIAL TO CREATE COMPETITIVE ADVANTAGE TECHNOLOGY AND / OR INNOVATION APPETITE FOR COLLABORATION VALUE POTENTIAL, ETC.
OPTIMISED SUPPLIER MANAGEMENT APPROACH
© 2014 State of Flux
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