STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
GOVERNANCE & PROCESS 105
Figure 3.1. Criteria most commonly used to segment suppliers – all respondents
OTHER (PLEASE SPECIFY) SUPPLIER'S CONTRIBUTION TOMARKETING AND / OR CONTRIBUTION TO BRAND VALUE SUSTAINABILITY AND CSR RISK REPRESENTED BY THE CATEGORY / SUPPLIER SUPPLIER'S ABILITY TO MANAGE RISK SUPPLIER'S APPETITE FOR COLLABORATION HISTORICAL RELATIONSHIP WITH THE SUPPLIER CATEGORY / SUPPLIER POTENTIAL TO GIVE YOU COMPETITIVE ADVANTAGE SUPPLIER'S TECHNOLOGICAL CAPABILITIES SUPPLIER'S INNOVATION CAPABILITIES SUPPLIER'S GENERAL CAPABILITIES POTENTIAL TO CREATE ADDITIONAL VALUE FROM THE RELATIONSHIP YOUR IMPORTANCE AS A CUSTOMER TO THE SUPPLIER LEVEL OF RISK REPRESENTED BY THE CATEGORY RISK REPRESENTED BY FAILURE OF THE SUPPLIER'S PRODUCTS OR SERVICES LEVEL OF RISK REPRESENTED BY THE SUPPLIER LEVEL OF SPEND IN THE CATEGORY LEVEL OF DEPENDENCE ON THE SUPPLIER LEVEL OF SPEND WITH THE SUPPLIER
0%
20%
40%
60%
80%
100%
© 2014 State of Flux
SEGMENTATION AND PRIORITISATION
Figure 3.2. Number of suppliers classified as strategic – all respondents
10% 15% 20% 25% 30% 35%
As segmentation has developed, so too has the realisation that the demands of SRM require careful consideration beyond the output from the first stage of the segmentation exercise – which essentially is a list of suppliers, the most critical at the top. The next step is to define the tiers and the supplier management treatment strategies for each. Another import factor will be the available resource before the supplier base can be arranged into the familiar pyramid. As a consequence, it is impossible to determine a ‘norm’ for the number of suppliers an organisation should consider strategic, as this is governed by a number of different factors, in most cases unique to each organisation. However, from the feedback we have received, most organisations are now settled on fewer than 25 as the optimum number.
0% 5%
1125 10 OR LESS
2650
5175
76100
DON'T KNOW >100
© 2014 State of Flux
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