ADVERT / SUPPLIERBASE
HOW TO CREATE A BUSINESS CASE
BY ALAN DAY
And more than two-thirds said the pandemic has increased their organisation’s focus on supplier management. In other words, those who fail to seize this opportunity, will only fall further behind the curve. Covid aside, there have long been numerous advantages gained by organisations who adopt the discipline. After presenting – and winning – the initial case, many organisations fail to capture the benefits they actually achieve. And it is this information – both hard data and anecdotal feedback – which helps to secure further support. Yet the quantification and reporting of material benefits should be quite straightforward; anything achieved post-contract should count towards the programme’s success (page 29). Some results are simpler to record than others, but procurement professionals are all-too-aware that what gets measured gets done, so recording successes should form part of any programme. More than three- quarters of Leaders, for example, are able to quantify the financial benefits derived from their supplier management arrangements. It’s also important to link your proposition directly to the way your organisation defines value. Financial success is just one element. As Craig Jones from Shell says (page 61): “Nothing is as powerful as real examples. Fundamentally, it boils down to a belief of the executives. For them it’s about the times when they’ve seen something get solved or answered quickly.” So make sure you are capturing those moments, recording and sharing them. Ideally your stakeholders will too and word will spread. Successful supplier management can also boost collaboration with key suppliers, increase trust, improve understanding of mutuality and put a greater focus on innovation (page 86). The most mature programmes can also quantify benefits such as risk reduction, innovation and other efficiencies. Consider this: Have you received increased commitment and support from your suppliers? Record it. Have you seen an improvement in the performance of your key partners? Report it. Has supplier collaboration gone up? Log it. Has risk been reduced or resilience increased? Document it. Have you been able to boost sustainability or social value as a result of your relationships? Own it. Ultimately, if tracking and measuring success gets lumped into a ‘not enough time’ or ‘too difficult’ pile, you shouldn’t be surprised when it’s hard to make the case for it to continue or expand. If the business has backed you in establishing a programme to deliver value through key supplier relationships, ensure that support is rewarded with clear and recorded results. Contact enquiries@stateofflux.com for help to make your case.
OPEN AND SHUT CASE
The multiple array of benefits delivered by successful supplier management should make it easy to justify investment.
for the job? right tools Do you have the
I N THE AGE OF COVID-19 it should be simpler for businesses to make a case for time and money to be invested into supplier management programmes. There is suddenly widespread appreciation of the benefits of knowing who your key suppliers are, where they are based, and having a good relationship. We already know – from more than 13 years of annual research and 17 years of practice – that those with such programmes achieve higher profits, lower costs, more innovation and improved competitiveness. Covid has shown that it is also key to reducing risk and boosting resilience. Without a formal approach that includes segmenting your supply base, keeping in regular touch with vital contacts and working collaboratively to deliver joint goals – you could be left without essential supplies when shortages strike. Relationship management was the most effective tool in mitigating the situation caused by Covid-19, this year’s respondents said (see page 96).
Leaders group highlights 2021 Here are some key figures from those with the most mature programmes to draw on when building your business case: 85% report improved risk management or risk reduction as a result of the work of their supplier management programme 73% reduced costs 64% benefited from supplier innovation 64% achieved cost avoidance
Manual supplier management processes result in an inconsistent supplier experience and processes that can’t be measured mean opportunities to unlock value are missed. SupplierBase is an award-winning platform that helps to maximise value and transparency across the supply chain, providing a single interface that reveals all supplier-related information both as a primary data source and connected with third party data sources. Ensuring your supplier management is repeatable, scalable and consistently applied across the business.
52% improved the efficiency of their supply chain 48% report better end-customer experience 30% improved speed to market 28% boosted profitability 21% grew sales and revenue
enquiries@stateofflux.co.uk srm.stateofflux.co.uk/2021-report
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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