CASE STUDY
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
188
Q: HOW DOES FIRSTGROUP DEFINE SRM?
Our strategic objectives are: ö ö Focused and disciplined bidding in our contract businesses ö ö Driving growth through attractive commercial propositions in our passenger revenue businesses ö ö Continuous improvement in operating and financial performance ö ö Prudent investment in our key assets (fleets, systems and people) ö ö Responsible partnerships with our customers and communities Q: HOW DID YOU MAKE THE CONNECTION BETWEEN THESE BUSINESS DRIVERS AND GREATER COLLABORATION WITH YOUR KEY SUPPLIERS? PK: We believe a number of our supply base have a vital contribution to make in achieving our strategic objectives (above). For example: key supply chain involvement is required to support all the bids we submit; our ability to make attractive commercial propositions has a huge dependency on developing effective commercial models with our suppliers; we need our suppliers to be a constant source of continuous improvement and innovation; and our investment in key physical assets will require our suppliers to work with us to ensure the best total cost solutions are understood. Q: HOW DID YOU SET ABOUT TURNING THESE ASPIRATIONS INTO REALITY? PK: Having defined what was important to FirstGroup, we assessed the potential impact our key suppliers could have on our strategic objectives. We invited those where the greatest potential existed to form a collaborative relationship using the SRM framework as a guide. Key relationships were then formalised at joint strategic workshops where the case for collaboration was made and captured in a joint relationship vision statement. We were then able to share and align respective business objectives and priorities, define value for both parties and agree a list of prioritised value improvement projects. We have a strong commitment to collaboration at FirstGroup as an enabler of differentiation – developing transparency, sharing, and opportunity which builds trust between our supply base and ourselves. Trust is the foundation which enables continuous improvement, co-operation, and collective action and shared efficiency gains.
Paul Keen: Our definition of SRM is a discipline of working collaboratively with strategic suppliers who have been identified as vital to the success of FirstGroup, to maximise the potential of those relationships for mutual benefit. We spent some time debating this as we felt it was important to have a single definition that actually described what we would do and resonated with our business stakeholders. We therefore wanted to use words and phrases that suggested action. For example: ‘SRM is a discipline’ suggests structure and consistency; ’working collaboratively’ represents a real change in behaviours; ‘vital to success’ gets the message about prioritisation across; and ‘mutual benefit’ covers the partnership angle. We see SRM as providing us with a strategic framework to develop policies, processes, culture and behaviours required to establish successful collaborative relations with our key suppliers and to drive continuous improvement. Our SRM programme aims to deliver step change in value creation through collaborative working, driven by a greater focus on organisational priorities. This is a robust business-wide approach that can be consistently applied across a variety of supply categories and is scalable. Q: WHAT WERE THE BUSINESS DRIVERS THAT MADE FIRSTGROUP THINK MORE ABOUT COLLABORATING WITH KEY SUPPLIERS? PK: FirstGroup’s services help create strong, vibrant and sustainable local economies. Our opportunity is to be the provider of choice for our customers and communities. We have a unique competitive advantage as a result of our scale and the diversity of our portfolio of market leading transport businesses. Our vision is to provide solutions for an increasingly congested world, keeping people moving and communities prospering. A key part of our strategy is the ability to leverage our scale by developing and sharing our global expertise for the benefit of our local markets. Hence, an opportunity was identified to unlock latent value through more effective relations with our supply base that is critical to our future success and at the core of our thinking.
We see SRMas providing us with a strategic framework to develop policies, processes,
culture and behaviours.
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