ENGAGEMENT
ENGAGEMENT
Do suppliers understand the value a supplier management programme can bring to both organisations?
opinion State of Flux
Leader
Fast Follower
Follower
Yes
94%
90%
52%
0% No
3%
12%
Don't know
6%
And that engagement starts from the top, with an organisation's leadership team clear on the value proposition it can deliver. Once they are onboard, supplier management programmes tend to gain more traction and barriers to executing some of the required value-release initiatives are overcome. The level of support from business and operational colleagues is equally crucial. These are the stakeholders that interact the most with suppliers and are often seen as the face of the organisation. Insufficient backing from these stakeholders can negatively influence the leadership team and stall the entire supplier management programme. Finally, as one would expect, suppliers themselves are fundamental to the success of any such programme. However, even in relatively mature programmes, engagement of suppliers can be inconsistent and trust can be lacking. Attempts to reach out and gather feedback can be hampered by a paucity of trust because suppliers who have had bad experiences sometimes take the view that “they’ll use this against us”. This is where a 360-degree relationship assessment plays an important part in revealing the true nature of the relationship. Used correctly, it also enables the building of trust and transparency to begin. Go to www.stateofflux.co.uk to learn more about how State of Flux conducts these evaluations.
Without adequate engagement and commitment from all parties involved, a supplier management programme is destined to fail. Having stakeholders across all levels of governance (from strategic, to operational and tactical) as well as across all parties (from procurement, the business, and the supplier’s organisation) engaged and involved is a fundamental prerequisite for establishing a mature supplier management programme. Only when all these groups and individuals are in place and invested in a programme’s success will it be able to generate value throughout its lifecycle. Our research validates this statement; in fact, those that perform well in the Value pillar, happen to coincide with those that experience the highest levels of engagement and support.
7%
36%
There is an opportunity for Followers to work with suppliers to better educate and develop their understanding of the value that a supplier management programme can bring. Followers must also ensure that they identify and focus on those suppliers that will appreciate the value of such a programme.
organisations areas to focus on and highlights what their partners most value by way of insight, information and engagement. It also helps to indicate whether your organisation is considered a customer of choice by your key suppliers and can help executives gain a first-hand view of what is done well and what needs further attention. The results of such structured feedback provide vital data with which procurement teams can argue for further investment into any supplier management programme as well as validate and celebrate success. It is an essential component to demonstrating the value a good supplier management programme can add beyond financial impact – and the Leaders of the pack clearly know this.
Gathering structured feedback
THOSE THAT PERFORM WELL IN THE VALUE PILLAR COINCIDE WITH THOSE THAT EXPERIENCE THE HIGHEST LEVELS OF ENGAGEMENT AND SUPPORT.
More than three-quarters of Leaders (76%) and half of Fast Followers gathered formal and structured feedback from their suppliers in the past year, while fewer than a quarter of Followers (23%) did the same. The survey results highlight a clear area in which those who are further behind with supplier management could improve. Gaining feedback on what your organisation does well at – as well as, equally important, what it could do better at – provides crucial insight into the views of key suppliers. It gives
FOLLOWERS SHOULD WORK WITH SUPPLIERS TO BETTER EDUCATE AND DEVELOP THEIR UNDERSTANDING OF THE VALUE THAT A SUPPLIER MANAGEMENT PROGRAMME CAN BRING.
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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