COLLABORATION
COLLABORATION
built more trust in the relationship after collaborating more closely with their suppliers. A total of 58% said they established a better understanding of mutuality and got suppliers to become more engaged about innovation and continuous improvement. Other benefits that scored highly included supplier executives being more engaged, a reduction in the number of disputes and escalations, as well as a better alignment on shared goals and objectives. The least quoted benefit (27%), but one that still holds tremendous potential for the future, is to become more aligned on sustainability goals and objectives.
Results of increased collaboration
Information shared with key suppliers
SUMMARY
(all respondents)
Leader
Fast Follower
Follower
Your company strategy
More trust in the relationship
81%
69%
79%
This year’s research demonstrates that mature supplier management programmes result in improved collaboration, which in turn leads to a series of mutual benefits. The percentage of those reporting increased collaboration has increased from 60% in 2020 to 72% in 2021, with a stronger showing for ‘increased greatly’ at 22% up from 16% last year. The number reporting no discernible improvement continues to drop and this year sits at an insignificant 2%. Leaders report the most positive feedback about improved supplier collaboration, although both Fast Followers and Followers are also positive to a lesser extent. Benefits generated from increased collaboration include building more trust, establishing a better understanding of mutuality, getting suppliers more engaged in continuous improvement and innovation, and reducing the number of disputes and escalations. That said, Leaders with mature programmes are more likely to be achieving these benefits compared to Fast Followers and Followers. On average, 55% of respondents believe they are a customer of choice for more than half of their key suppliers. Among those classified as Leaders, this figure becomes as high as 91%. As expected, the same figure drops when focusing on Fast Followers (70%) and Followers (43%). Compared to last year, the percentage of respondents that conduct a 360° relationship health check as part of their supplier management programme, has decreased significantly from 45% to 35%. A potential justification for this could be the operational disruptions caused by the pandemic, preventing organisations from focusing on strategic initiatives. Amongst Leaders, this figure dropped from 86% in 2020 to 75% in 2021.
52%
We've established a better understanding of mutuality (more win-win outcomes)
Supplier performance data
58%
72%
68%
46%
Suppliers are more engaged on innovation and continuous improvement
Future demand and forecast data
58%
72%
64%
Supplier executives are more engaged
51%
45%
The strategy for your supplier relationship
There are fewer disputes and escalations
Trust and transparency is key
65%
38%
44%
21%
Those classified as Leaders appear to be more consistent in sharing valuable information with their counterparts in their key suppliers’ organisations. Being transparent with information such as the company strategy (81%), the plan for their individual supplier relationship (65%) and the needs and expectations of their end customer (60%) helps Leaders align with their key suppliers on a strategic level. At the same time, sharing information such as supplier performance data (72%), future demand and forecast information (72%) or company news that affects suppliers (56%) supports Leader/supplier alignment on an operational level.
We've established a number of shared goals and objectives
General company news
61%
43%
55%
43%
Our internal executive stakeholders are more engaged
The needs and expectations of your end customers
42%
60%
54%
We are working together to reduce supply chain risk
41%
42%
Your business development plans
60%
We work more collaboratively on compliance with contract SLAs/KPIs etc
26%
In 2019, just over half of all organisations that responded to our questionnaire reported that improved collaboration achieved via their supplier management programme was yielding both direct financial benefits and indirect or non-financial benefits. Almost 50% were optimistic but said it was too early to be sure about the value they had gained. In 2020, the proportion of respondents reporting increased collaboration grew to almost 60%, with a strong showing for ‘increased greatly’ at 16%. Now, in 2021, the case for effective collaboration seems even stronger with 72% of our respondents reaping the associated benefits and 22% reporting that collaboration ‘increased greatly’. The number reporting no discernible improvement has been reducing over the years. Starting with 7% in 2019, the percentage halved to 3.5% in 2020 and this year it has reached a low of
2%. However, it’s the more mature supplier management programmes implemented by Leaders where we see the most positive feedback. Of the Leaders, 98% report improved supplier collaboration, with 68% saying that it has increased greatly.
20%
41%
98 %
Company news that affects them
56%
We engage in more joint planning
47%
39%
Shared goals and joint business planning
41%
OFLEADERSCLAIM THATTHEIRSUPPLIER MANAGEMENTPROGRAMME HAS IMPROVEDSUPPLIER COLLABORATION
We have joint plans in place to create value
Guidance on improvement and innovation
53%
Collaboration is defined by State of Flux as the process of two or more people or organisations working together to complete a task or achieve a common goal. As simple as this sounds in principle, it can be hard to collaborate without the requisite levels of trust and full alignment on common goals and objectives and how these can be achieved (a joint plan) being in place. For many organisations, however, collaboration has not yet developed to the point that any of these are established. While 43% report that their improved collaboration with suppliers has resulted in shared goals and objectives, only 29% have converted them into a joint plan.
41%
29%
Some industry sector variation on collaboration
20%
We are better engaged on sustainability
60 %
Your supply chain risk assessment
27%
According to feedback, the industry sectors collaborating with their suppliers most are financial services and charities. Those least likely to be collaborating are the public sector and transport and logistics.
51%
36%
OFLEADERSHAVECREATED JOINTBUSINESSPLANSFOR MORETHANHALFOFTHEIR MOSTKEYSUPPLIERS
13%
Information about the market you operate in
51%
75 %
29% 28%
Benefits of increased collaboration
Your product/service/technology roadmaps
This year’s research identifies a broad range of examples of collaboration and its benefits. Slightly more than two in three respondents reported that they
OFLEADERSGATHER SYSTEMATIC360FEEDBACKTO ASSESSTHEHEALTHOFKEY SUPPLIERRELATIONSHIPS
46%
32%
22%
8 7
8 6
STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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