SIX PILLARS OF SRM
SIX PILLARS OF SRM
What are your strategic objectives? To what extent are you dependent on the contribution of third party suppliers to achieve them? What more could you be doing with your most important and strategic suppliers to help achieve those goals? That’s the SRM value proposition. Then it’s a question of working with the supplier to understand exactly what you can to do, together, both within existing contracts and beyond. Read more on page 20 Is your SRM programme a business change programme with a large footprint outside procurement? How engaged and supportive of SRM is the C-level team? How do you get buy-in from business and operational managers who deal with suppliers day-to-day? How will you engage suppliers more in the process? The answer to all three questions lies in a strategy for stakeholder engagement and support. Read more on page 32
Six pillars of SRM
1. Value
How do you decide which suppliers are truly strategic? What decision making criteria should you be using? What are the best process, governance and engagement models to apply? Are roles and responsibilities properly defined? Is contract, performance and risk management sufficiently robust? Read more on page 44
2. Engagement
3. Governance
4. People
Is the SRM role properly defined? Is SRM reflected in the role profiles of others in the organisation? Do you understand what skills and competencies the role requires? Have your evaluated current skills and competencies and developed training and personal development solutions? Is SRM part of performance objectives and measurement? Read more on page 60
5. Technology
6. Collaboration
Are you able to manage and share supplier related information? Can you extract data from all relevant enterprise software including ERP, finance, procure-to-pay, and contract management systems? Are all aspects of the supplier management lifecycle sufficiently enabled by technology? Read more on page 72
The State of Flux six pillarsmodel for SRM excellence is based on a deep understanding of the key elements that need to be combined to develop and sustain an effective approach tomanaging supplier relationships. Developed and refined over the past 14 years, it is now used by leading global businesses as the blueprint for their SRM programmes. Within each pillar there are a number of critical elements to fully enable SRM and these are described here. Closer examination of the links and dependencies between these activities reveal the holistic nature of SRM and the need to design a programme accordingly. Companies leading in SRM are developing strong and consistent practices and behaviours across all the pillars.
Are you collaborating sufficiently with your strategic and most important suppliers? Are you developing joint plans that deliver the strategic objectives of both organisations? Are your relationships sufficiently open and transparent and based on trust? Are you benefitting from supplier innovation? Are you a customer of choice? Read more on page 84
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STATE OF FLUX
2018 GLOBAL SRM RESEARCH REPORT
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