STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
GOVERNANCE & PROCESS 107
Figure 3.4. Maturity of governance models for key supplier relationships – all respondents
Figure 3.6. Qualityof oversight of SRMgovernance, process compliance andgeneral activitieswithkey suppliers – all respondents
10% 15% 20% 25% 30% 35% 40%
10% 15% 20% 25% 30% 35%
0% 5%
DOCUMENTED AND FULLY IMPLEMENTED FOR ALL KEY SUPPLIER RELATIONSHIPS
DOCUMENTED AND PARTIALLY IMPLEMENTED
DOCUMENTED BUT NOT YET IMPLEMENTED
WORK IN PROGRESS
NOT STARTED
0% 5%
VERY POOR POOR ADEQUATE GOOD VERY GOOD
© 2014 State of Flux
© 2014 State of Flux
Figure 3.5. Maturityof governancemodels for key supplier relationships – leaders / fast followers / followers
○ LEADER ○ FAST FOLLOWER ○ FOLLOWER
0% 10% 20% 30% 40% 50% 60%
DOCUMENTED AND PARTIALLY IMPLEMENTED
DOCUMENTED BUT NOT YET IMPLEMENTED
WORK IN PROGRESS
NOT STARTED
DOCUMENTED AND FULLY IMPLEMENTED FOR ALL KEY SUPPLIER RELATIONSHIPS
© 2014 State of Flux
GOVERNANCE MODEL MATURITY AND OVERSIGHT
littered with good intentions represented by processes, methodologies, guidelines, handbooks, etc. However, much of this good work goes to waste when it fails to become embedded and adopted as business as usual. In many cases, the reason for this is that after an initial launch effort, the process owner steps back and fails to monitor the full extent of the implementation and ongoing process compliance. The result has often been a drop-off in process compliance, and a return to inconsistency and fragmentation. At worst, processes are abandoned altogether. SRM is particularly susceptible to this phenomenon. It is often an activity embedded in the business and does not have the same structure and visible check points as other processes. Our survey question was designed to uncover how good companies consider the oversight of their SRM governance, process compliance and general supplier management activities. Around seven in ten respondents consider the oversight of their SRM activities to be at least adequate.
Governance is defined as ‘a method or system of government or management’. A method or system can be designed and built, but will only be effective if properly implemented and maintained. There has been good progress in designing and building governance models for SRM, but the challenge is to implement and maintain those models to ensure they deliver the desired outcomes. The first question to address is the build and implementation ( figure 3.4 ). Overall, we can see only 13% of companies have fully documented and implemented their governance model across all of their key suppliers. The vast majority are at various stages of work in progress. For leading companies, the development and deployment of their governance model is much more advanced, with 34% of leaders having documented and fully implemented ( figure 3.5 ).
Next we need to consider oversight ( figure 3.6 ). The road to procurement and supply chain excellence is
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