RELATIONSHIP DEVELOPMENT & CULTURE
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
172
TTTTTTTTTTTTTTTTTTTTTTTTTU RELATIONSHIP DEVELOPMENT & CULTURE
Pillar executive summary
For SRM to deliver real sustainable business benefit, it will require the business to fundamentally change the way it regards and works with all suppliers, particularly its critical suppliers.
There is much more scope for effective collaboration. It requires more than simply throwing people together in joint teams. It needs to be done with clear aims and objectives, defined roles and responsibilities, and above all, changes in behaviours. Behavioural change is an essential part of effective SRM, and the delivery of sustained change and business benefit. It must start at the individual level to change at an organisational level. While it's recognised that each individual has a different journey to undertake in changing behaviours, it has to be the goal to support them to change. Many companies are still a long way from really understanding customer of choice. Just over 50% of companies surveyed believe they are a customer of choice for more than half of their key suppliers. While we recognise it is impossible to be a customer of choice for all key suppliers, not being a customer of choice is exposing the company to risk, as competitors receive priority treatment.
Fundamental to the health of ongoing relationships are the attributes described here within the relationship development and culture pillar. These include: openness and transparency, innovation, alignment, trust, collaboration, and behavioural maturity. Relationships need to be open and transparent. For us this equates to sharing strategic information with key suppliers – a tangible way to demonstrate trust. Our research indicates there is a lot of scope to share information beyond traditional operational subjects. Technology is under-utilised to enable the sharing of information effectively, efficiently, and in a controlled and consistent fashion. In good supplier relationships, ideas and innovation flow freely. Harnessing more supplier innovation continues to be a challenge despite some improvement. Evidence shows organisations that are first movers in this area undoubtedly have a huge opportunity to improve competitive edge. Only one third of companies have conducted a 360° relationship assessment. While this is higher than in previous years, more can be done for organisations to understand how strategically and culturally aligned they are with their key suppliers, and how relationships are perceived by both sides.
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