STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
CURRENT STATE OF SRM 27
RELATIONSHIP MANAGEMENT AND DEVELOPMENT IS INCREASINGLY THE FOCUS
Defining exactly what SRM means for a company has long been a challenge. In many cases, there is a confusion is between SRM and supplier performance management (SPM). While an effective and holistic approach to supplier management is key, many companies have failed to focus sufficiently on relationship management and development. However, this year we have seen a significant increase in companies reporting that the primary focus of their SRM programme is managing key supplier relationships collaboratively to deliver more value ( figure 0.1 ). Last year, the manufacturing sector was the most focused on collaboration, with around 70% reporting that the primary focus of their SRM programme was on collaboration with key suppliers. However, this year the professional services industry reports the highest proportion of SRM programmes focusing on collaboration and driving increased value ( figure 0.2 ).
Creating the correct focus for your SRM programme is imperative. Our analysis reveals that more companies are focusing on working collaboratively with key suppliers to drive more value. However, as we have stated previously, this is a balancing act that needs to also maintain the appropriate process and governance around performance, contract and risk management. It is therefore essential that each of these elements is defined and form part of a holistic approach to supplier management.
Figure 0.1. What is the primary focus of SRM in your organisation currently? – 2012 / 2013 / 2014
○ Managing supplier contractual obligations to ensure negotiated terms are adhered to. ○ Managing key performance indicators (KPIs) to ensure suppliers deliver products and services as per the contract. ○ Managing key supplier relationships collaboratively to deliver value (cost reduction, risk reduction, innovation, etc.) that may well go beyond contractual obligations.
2014
2013
2012
0% 10% 20% 30% 40% 50% 60% 70% 0.8
© 2014 State of Flux
Figure 0.2. What is the primary focus of SRM in your organisation currently? – Industry sectors
100%
○ Managing supplier contractual obligations to ensure negotiated terms are adhered to. ○ Managing key performance indicators (KPIs) to ensure suppliers deliver products and services as per the contract.
80%
60%
40%
○ Managing key supplier
relationships collaboratively to deliver value (cost reduction, risk reduction, innovation, etc.)
20%
that may well go beyond contractual obligations.
0%
FINANCIAL SERVICES
MANU FACTURING
OIL AND GAS
FOOD AND BEVERAGES
IT / HIGH TECH
UTILITIES
PUBLIC SECTOR
HEALTH CARE
PROFESSIONAL SERVICES
AUTO MOTIVE
© 2014 State of Flux
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