STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
CASE STUDY 169
previously manual and cumbersome process into an efficient and insightful means for assessing a supplier’s control framework to further protect LV= customer data. Following one joint brainstorming session, the idea to create within ICO an environment for capturing supplier innovation was agreed. Supplier feedback highlighted the frustration many suppliers experience of not knowing how to present great ideas to LV=. In response, LV= designed an innovation blueprint, which State of Flux Technologies built. The end-to-end supplier facing innovation process is now facilitated using ICO and ensures transparent visibility of progress. The investment has delivered a return in less than six months. One of many submissions was an idea from a payment services supplier to create a new method of storing card data. The idea was implemented utilising a fast track process and is now delivering sustainable bottom-line benefit of £84,000 per annum. The innovation tool is recognised as a true value-add tool. Collaboration with LV= has created scalable and sustainable SRM. LV= are formally recognised for their excellence in supplier management and are leading the way with their technology implementation. Lance Younger, CEO of State of Flux Technologies It is only from collaborative working that LV= has managed to achieve this level of maturity and in a relatively short amount of time. Now formally recognised as a customer of choice with many of the strategic and preferred suppliers, the LV= business is enjoying preferential access to scarce supplier resource and capability. The supplier management team are driving innovation and value throughout the supply chain. State of Flux and LV= have delivered a highly successful, scalable and sustainable supplier management programme, recognised across multiple industry sectors. LV= have successfully accelerated SRMacross their business and beyond. No other customer has challenged us as LV= has to develop new
Transparency was key. Issues were tackled as they arose, and debate, challenge and idea generation led to 360 relationship survey functionality being developed. The surveys became the baseline for all key supplier relationships, assisting the development of joint action plans and other improvement activities. LV= stakeholders wholly embraced the opportunity to see their feedback translate into action plans. As one senior project manager remarked, “Great tool, great collaboration – good to see a positive outcome of proactive supplier engagement and management. Well done!” Not satisfied with accepting the successes already achieved, the two companies sought further ICO enhancements. These included a ‘lite-touch’ implementation for suppliers with a relatively lower risk and spend profile. An advanced survey engine was also used to build an automated Information Security Questionnaire. This new capability included skip logic and automated scoring that turned a
PARTNERING EVOLUTION
In 2012, LV= participated in the State of Flux SRM survey and were benchmarked as improving but still ‘followers’ in a number of areas. A detailed SWOT analysis was conducted to help LV=identify improvement areas in its supplier management programme. In the 2013 report and again in 2014, LV= are recognised amongst a small group of SRM leaders.
CONCLUSION
There is a myth perpetuated that ‘collaboration doesn’t come naturally in business’. LV= and State of Flux explored the models and process of collaboration and concluded that, at its core, collaboration serves as a framework for a strategic conversation to achieve a common mission. Working collaboratively, the two companies have delivered significant and sustainable cost, service, risk and relationship value. LV= would not have matured its supplier management capability at the speed or indeed to an industry good practice standard without working well together. Collaboration is traditionally defined as the action of working with someone to create something. LV= and State of Flux have collaborated extraordinarily and trust fundamentally underpins the successes. Collaboration and sharing are highly valued attributes in LV= and have become increasingly important to success in an interconnected world.
Note: This case study is based on the shortlisted LV= entry to the 2014 Procurement Leaders Awards for best external collaboration.
capability and system functionality. Alan Day, Chairman of State of Flux
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