CASE STUDY / ELECTROLUX
ADVERT / ENGAGEMENT
“If you need to read your contracts to get through these situations you won’t get very far,” says Truyens. “If you can pick up the phone and the person on the other side is used to your voice and knows you from a human perspective, the level of commitment and engagement for a rapid response is a lot better.” Another way in which strong supplier management can add value to business, he says, is by helping it cope with the speed of change. “Any relationship goes through storms,” says Truyens, “when the supplier has a financial challenge or when legislation changes and we need to adapt products, we know there will be costs coming. The key part is a willingness to continue together.” The company hopes that by formalising certain supplier relationships it will secure the availability of suppliers’ top engineers to work on projects with Electrolux R&D experts. It will also consider how both sides can benefit from developing ideas together. From an operational perspective, the plan is to standardise its approach regardless of country culture, to consider tone of voice and employ greater empathy. Specific supplier treatment strategies will be flexed according to the type of supplier and how essential they are to the success of the business. It will also continue to seek out providers who mirror its approach to sustainability. “It's incredibly important to us,” says Truyens. “As a Swedish company it's in our DNA and is something we have been focused on for a very long time. We want to make sure we team up with companies that are willing to invest in sustainability in the same way we do. We also need to create more transparency through the supply chain. "We may want to talk to component suppliers who are at tier four, five or six, for instance, to get clarity about where raw materials are sourced to ensure they are done so responsibly.” He says SRM facilitates this kind of discussion because communication lines are open, regular and formalised – and each side is more likely to understand the other’s ambitions and be used to collaborating together. “If there is already a strong mental alignment between us, the attitude is more ‘can-do’ than ‘shall we do?’” Schiavon's team, for instance, is heading a project to consider the most ecological way to get goods from Asia to Europe, the US or Latin America. “That discussion is way beyond cost,” says Truyens. “And we are also touching base with these companies at an executive level. If you have a relationship with a business that understands your intentions, that level of connection means everything moves more quickly and easily. That's how I see it: You’re knitting your- selves together and the join needs to be very strong. You cannot assume it will improve automatically, you need to continue to pay attention to make it happen.”
positions and then built on these with a further 40 interviews. It also ran a ‘tech stack’ review to assess whether existing technology was fit for purpose and to discover the extent to which it was being used operationally. Finally, it ran a skills competency assessment, which was completed by 138 internal stakeholders covering a range of roles. State of Flux was able to give Electrolux insight into its pockets of best practice, areas for improvement and benchmark its current state against industry and global regions. It also made recommendations to address existing performance gaps and internal inconsistencies between regions and product lines. This gave Electrolux clear roadmaps for improvement and development, which enabled it to create a value proposition to present to stakeholders and executives to gain their approval. Momentum is now building “like a snowflake that becomes an avalanche,” says Truyens. The company recently agreed to initiate phase two this year, which consists of a formal roll out with a small number of suppliers.
business case? Do you have a clear
Building resilience
Truyens says Covid-19 has not only highlighted the value of strong supplier relations but also the importance of empathising with others. “All of us in the purchasing, quality and operations communities have come to realise that when you want to build valuable relationships, you don't do it through your contracts, you do it through connections with people. Situations like the pandemic have forced us to think about the challenges from both sides.” And it is strong relationships that boost a business’s overall resilience to cope when challenges occur. In addition to Covid, supply chains have had to contend with recent geopolitical tensions, cyber attacks and global warming prompting extreme temperatures and flooding.
WHEN YOU WANT TO BUILD VALUABLE RELATIONSHIPS, YOU DON'T DO IT THROUGH YOUR CONTRACTS, YOU DO IT THROUGH CONNECTIONS WITH PEOPLE.
Supplier management programmes often fail because of a lack of support from business stakeholders or evidenced return on investment. It starts with a business case. Talk to us about a structured opportunity diagnostic. We will benchmark your organisation and review your supplier data to uncover and quantify opportunities for delivering value, ensuring you get stakeholders engaged and bought in right from the start.
QUICK FACT: ELECTROLUX SOUGHT FEEDBACK ON ITS SRM PRACTICES FROM SUPPLIERS AND STAKEHOLDERS; EVALUATED ITS USE OF TECHNOLOGY; AND RAN A SKILLS COMPETENCY ASSESSMENT.
enquiries@stateofflux.co.uk srm.stateofflux.co.uk/2021-report
4 7
4 6
STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
Powered by FlippingBook