ARTICLE
STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
36
SRM
SPM
TRAINING As previously mentioned, the people responsible for managing strategic suppliers as part of SRM will require an enhanced relationship management skill-set. Another feature of SRM is it can often involve joint training with key individuals from both organisations on SRM; what it is; how both parties will get value; what the respective roles are; what behaviours are expected; and how the risk and innovation processes work. PERCEPTION MEASUREMENT OR 360º FEEDBACK This looks at both your organisation and the supplier's view of the relationship. It is an important measure of the health of the relationship. For suppliers who are part of an SRM programme, this should be conducted annually (usually fed into a joint account planning workshop). ACCOUNT PLANNING For SRM to create change, it must identify and implement actions. These actions are generated and captured in a joint account planning workshop. This helps to ensure both organisations are aligned, and resources are used in the most efficient and effective manner. Some organisations also include a charter for strategic suppliers, where they agree what behaviours are acceptable between both organisations. BENEFIT SHARING In the instances where benefits are shared, it’s with strategic suppliers involved in an SRM programme. The process on how benefits are shared should be articulated and agreed as part of the governance model. VALUE The value proposition for SRM is about creating new value. This can manifest itself in many ways, from joint cost improvement initiatives through to risk reduction, innovation, new business models, and joint go-to-market opportunities.
TRAINING SPM training will focus much more on process and problem-solving.
PERCEPTION MEASUREMENT OR 360º FEEDBACK Where the priority is SPM, these are usually used if there is an issue with the supplier relationship.
ACCOUNT PLANNING Joint action planning is also a feature of good SPM, but this will focus more on event-driven plans and actions to correct performance issues or to drive continuous improvement.
BENEFIT SHARING Benefit sharing in SPM is usually more defined – the contract may well contain a provision for service credits and debits. These will be managed using the measured performance data collected. VALUE The focus of SPM is to realise the value negotiated and agreed in the contract, and over time to enhance that value through continuous improvement.
IN SUMMARY
For the benefit of all those involved, a clear definition of each element of supplier management should be developed and socialised with all impacted stakeholders. This definition should then act as the reference point for the development of capability in each of these areas. If you are uncertain about the definition of each element of supplier management and whether you have a good practice approach, it would be recommended to undertake a diagnostic review and create a best practice gap analysis.
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