KEY FINDINGS
KEY FINDINGS
KEY FINDINGS SUMMARY OF
Areas requiring improvement 49 %
Relationship management 65 %
COVID-19
The coronavirus pandemic continues to have a profound impact on organisations and their supply chains.
Nearly half the respondents indicated that supply chain risk management required improvement.
Relationship management was the most effective aspect in mitigating the effects of Covid-19, among 65% of respondents.
Headline feedback for each of the Six Pillars of SRM
VALUE
ENGAGEMENT GOVERNANCE
PEOPLE
TECHNOLOGY COLLABORATION
Skills and competency framework 81 % Development of a skills and competency framework has been a priority for supplier management Leaders.
Dedicated systems 2 in 3 Two-thirds of respondents report using dedicated in-house or third-party systems for supplier on-boarding and capturing and maintenance of master data and contract management. Key benefits 78 % Supplier performance management and improvement was the highest stated benefit among 78% of respondents.
Supplier collaboration 98 % of Leaders assert that their supplier management programme has improved supplier collaboration, with 68% saying that it has increased greatly. Collaboration benefits 69 % Nearly 7 in 10 said improved trust in the relationship is the primary benefit of increased collaboration.
Senior management and executive support 99 % The vast majority of Leader respondents indicated they have senior management and executive level support for supplier management. Barriers to executive-level support 62 % More than 6 in 10 respondents flagged other business priorities as the main barrier to obtaining senior management and executive-level support for supplier management. Supplier understanding of value 94 % Almost all Leaders said their suppliers understood the value a supplier manage -ment programme provided both parties. Supplier feedback 23 % Less than a quarter of Follower respondents indicated that they had gathered supplier feedback in the past 12 months – compared to 76% of Leaders.
Segmentation criteria 87 % Nearly 9 in 10 respondents said the business criticality of products/services was the most important segmentation criteria used.
Business driver for supplier management development 63 %
The number that indicated that risk reduction/management was the most important driver behind investment in supplier management for the next year. Value definition 82 % Over 8 in 10 said their organisation defined value as cost reduction or avoidance, 40% higher than – social values. Financial benefits from supplier management programmes 76 % More than three quarters of Leaders were able to quantify the financial benefits derived from their supplier management programme.
Skills identification 58 %
Contract and performance management 75 %
Communication is the most important supplier management skill, as cited by 58% of respondents. There was strong consensus across all respondent maturity levels that this was key.
Three quarters of Leaders confirmed that effective contract and performance management is in place for 75%-100% of their suppliers. Risk management 13 % Only 13% of Followers said risk management was in place for 75%-100% of their suppliers.
Customer of choice benefit 75 %
Training 1 in 2
Relationship management 4 in 10
Improved account management and executive focus was the most cited customer of choice benefit among three-quarters of the Leaders group, with 'additional commitment' also reported by 74%.
Just over half of Follower respondents indicated no training has been provided within the past 12 months.
Around 4 in 10 respondents do not use any technology to help them perform relationship management.
Development areas 49 %
ROI 8 %
Treatment strategies 99 %
Joint business plans 92 %
Supplier-derived benefits 63 %
Nearly half of the respondents said strategic thinking was the area most in need of development. Despite this, it has been low on the list of training provided in the past 12 months.
Only 8% of respondents were able to quantify the financial return on investment, with this ranging between 2% and 6%.
Nearly all Leaders and the vast majority of Fast Followers (87%) use the outputs oftheir segmentation process to define treatment strategies for suppliers, clearly marking them out from the Followers.
Over 9 in 10 Followers indicated that they had joint business plans in place with less than 50% of their suppliers.
Increased commitment and support from the senior management at key suppliers was the main supplier-derived benefit fromprogrammes among Leaders.
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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