STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
GOVERNANCE & PROCESS 117
current business and operational priorities are being protected by effective contract, performance and risk management.
be part of a holistic approach to supplier management, which also incorporates contract, performance and risk management. In the section ‘stakeholder engagement and support’, we explore the dependency that SRM has on gaining cross-functional stakeholder support. Our view is that the SRM conversation will be a very difficult one to initiate with stakeholders if they are not totally confident their
TREATMENT STRATEGIES
Key to effective and efficient SRM is to have the correct treatment strategies aligned to each tier of supplier segmentation. The below graphic illustrates a typical three tier treatment strategy.
SUPPLIER SEGMENTATION TREATMENT STRATEGIES
PERFORMANCE + RELATIONSHIP + STRATEGIC FOCUS
TIER 1
PERFORMANCE + RELATIONSHIP FOCUS
TIER 2
PERFORMANCE FOCUS
TIER 3
FOCUS FOR SRM
SRM OPPORTUNITY
LITTLE OR NO OPPORTUNITY / BENEFIT
APPROACH: HIGH CRITICALITY, HIGH COLLABORATIVE VALUE OPPORTUNITIES (SRM + SPM + CM)
TIER 1
APPROACH: HIGH CRITICALITY, LOW COLLABORATIVE VALUE OPPORTUNITIES (SPM + CM)
EFFORT, RESOURCE & COMMITMENT REQUIRED
VALUE POTENTIAL & RETURN ON INVESTMENT
TIER 2
APPROACH: MEDIUM CRITICALITY, LOW COLLABORATIVE VALUE OPPORTUNITIES (CM +MBE)
TIER 3
© 2014 State of Flux
SRM essentials
ö ö Keep an open mind regarding operating models – select the approach that works considering the organisation’s culture, skills, capacity, etc. Contact us on +44 (0)2078 420 600 or email us at enquiries@stateofflux.co.uk to discuss governance and process.
ö ö Ensure SRM is part of a holistic approach to supplier management, with robust contract, performance and risk management governance and process. ö ö Review your segmentation approach to ensure it takes more than just spend and risk dimensions into account. ö ö Ensure strategic reviews have an 80/20 agenda (80% looking forward / 20% looking back). ö ö Create a RACI as part of the governance model for all key relationships.
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