STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
Executive summary 7
3. GOVERNANCE AND PROCESS ö ö More than eight in ten companies have now completed a formal segmentation of their supplier base. ö ö Spend and risk remain the key segmentation criteria but other more value-based criteria are increasingly being used. ö ö Governance models are more prevalent but have gaps. The most significant being the lack of regular risk reviews and the absence of RACIs. 4. PEOPLE AND SKILLS ö ö 70% of leading companies have defined the SRM role compared to 41% of others. ö ö Less than half have moved onto having an SRM-specific skills and competencies matrix, performing an SRM competency assessment and having SRM-specific training options available. ö ö SRM leaders and fast followers are more likely to be creating dedicated SRM jobs responsible for a portfolio of supplier relationships. 5. INFORMATION AND TECHNOLOGY ö ö Information and technology remains the lowest performing area across all pillars with leaders, fast followers and followers all still in the developing phase. Other respondents are ‘undeveloped’. ö ö Leaders and fast followers are three times more likely to be making significant use of technology. ö ö Lack of functionality, disparate systems and accessibility are some of the key reasons for poor adoption. ö ö Leaders and fast followers are three times more likely to have technology in place to manage relationships. 6. RELATIONSHIP DEVELOPMENT AND CULTURE ö ö Leaders are far more likely to be sharing strategic information with suppliers. ö ö Leaders report that negotiations are concluded faster and have better outcomes as a result of SRM. ö ö Regular collaboration with suppliers takes place with around 75% of leaders, compared to 50% across others.
ö ö 68% of respondents place responsibility for SRM in procurement. ö ö Less than 20% of respondents report having robust supplier performance, contract and risk management in place for more than 75% of their key suppliers. ö ö The majority of companies are conducting periodic strategic reviews with key suppliers.
ö ö Cross-functional teams are essential to good SRM and over half of all respondents are making use of them. ö ö The previously reported demand and supply gap for SRM training remains. ö ö The proportion of companies investing in training has declined since we started our research in 2009. ö ö Companies identified as leaders in SRM are also the ones that are making the training investment. ö ö 81% of respondents are using Excel to create and manage supplier management reporting. ö ö Leaders share more information with their key suppliers than other organisations. ö ö The top four benefits of having effective supplier management technology in place are: ö ö Information management, sharing and reporting (69%) ö ö Supplier performance improvement (68%) ö ö One place to manage suppliers (68%) ö ö Supplier management oversight (62%) management information.
ö ö Only around 50% of leaders consider themselves to be good at capturing supplier innovation. ö ö 77% of leaders believe they are a customer of choice for more than 50% of their key suppliers. ö ö Only around 30% of companies are using a 360° type tool to assess the health of their key relationships.
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