GOVERNANCE & PROCESS
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
114
Essentials
*PROCUREMENT LIFECYCLE MANAGEMENT
*PROCUREMENT LIFECYCLE MANAGEMENT The integrated disciplines of managing all aspects of the procurement lifecycle. State of Flux 2013 Global SRMResearch Report *SRM A discipline of working collaboratively with those suppliers that are vital to the success of the organisation, to build trust and maximise the mutual value of those relationships. State of Flux 2012 Global SRMResearch Report
NEW VALUE
*SRM
ENHANCE VALUE
PERFORMANCE MANAGEMENT
MANAGE VALUE
CONTRACT MANAGEMENT
SECURE VALUE
RISK MANAGEMENT
CAPTURE VALUE
STRATEGIC SOURCING
IDENTIFY VALUE
CATEGORY MANAGEMENT
POST CONTRACT AWARD
PRE CONTRACT AWARD
© 2014 State of Flux
THE HOLISTIC APPROACH TO SUPPLIER MANAGEMENT
ö ö The contract remains a live document that is monitored and revisions are agreed as required to meet the changing needs of the business. ö ö Performance management continuously checks the delivery of the contracted value and has the potential to enhance value through continuous improvement. ö ö SRM is the selective activity that takes place with a relatively small number of key suppliers to create new value that is not a contractual obligation of either party. ö ö In addition, it is expected that the environment created by SRM will be of enormous benefit to the other activities that make up the management of the procurement lifecycle. It should be expected that if you drill down in to any supplier relationship that is being well managed, you will find good evidence of strategic sourcing, risk management, contract and performance management.
We believe that having a solid foundation of contract, performance and riskmanagement is essential for SRM to be truly effective. While this can be illustrated in several ways, we have chosen to use the followingmodel to reflect both the procurement timeline and the build process that starts with category management and strategic sourcing. These activities do not take place in isolation. Each activity should inform the next and be built on the previous. For example: ö ö Category planning and strategic sourcing will identify and capture the potential value for a contract as well as identifying risks. ö ö Good risk management will take the information from the sourcing activity, and secure the value by creating a contract and business continuity plan that mitigates risks.
ö ö Residual risks will be understood and form part of ongoing risk management.
ö ö The value identified in the sourcing process will be assured when it is embedded in the
contract and will inform the ongoing performance management activity.
Powered by FlippingBook