COVID
COVID
Total responses on what aspects of supplier management approach required improvement due to the ongoing pandemic (2020 vs 2021 comparison)
The capability within supplier management teams to have this level of conversation is, however, sometimes hindered by lack of experience or training, hence external support for training or facilitating such conversations can be of value to an organisation trying to achieve greater supplier collaboration.
As the world continues to respond to the pandemic and starts to learn to live with its ongoing long-term effects, increased supply chain resilience is the end- goal of all mature supplier management programmes. Asking survey respondents how Covid-19 was impacting their supply chains was a last-minute addition to last year's questionnaire. It was added when it became clear the virus was going to have a dramatic, ongoing and unparalleled effect on supplier management and supply chains globally. Including it in the question-set once again this year has enabled us to observe and analyse how it has affected organisations into 2021, and how respondents have been mitigating its effects. opinion State of Flux Having experienced Covid’s disruptive impact on supply chains over the past 18 months, organisations around the world have started re-evaluating the importance of establishing robust and resilient chains. And with this increased appreciation, supplier management has become more relevant than ever before. Procurement and supplier management professionals should seize the opportunity this increased visibility and focus provides to help their organisations boost resilience and reduce risk through a formal approach to supplier management. When it came down to it last year, it was relationships between people that meant some organisations could secure vital supplies and some could not, and so it continues this year. Being a customer of choice is in part an emotional decision on behalf of suppliers who will choose not only which organisations it makes business sense to support, but who they wish to help.
2020
2021
Governance and oversight
Supply chain risk management
47%
24%
22%
49%
Collaboration and team working
Communication and information sharing
19%
13%
18%
32%
People skills and competence
Relationship management
17%
17% 18%
28%
Supplier management technology
Innovation
37%
18% 17%
28%
Performance management
27%
23%
Supply-side priorities for Covid-19 recovery
2020
2021
Review and upgrade supply chain risk management
60%
62%
Contingency planning to identify alternative suppliers
56%
Our research supports this view. Most respondents agree that relationship management proved to be the most effective element of supplier management in mitigating the adverse effects of the pandemic. This is a clear indication that organisations need to continue investing in this area and aim to establish a mature supplier management approach that has relationship management at its core. This will significantly help not only the ongoing response to the pandemic, but also provide a proactive defence against any further disruptors that may occur in the future.
60%
Boost collaboration with suppliers
45%
49%
SUPPLIER MANAGEMENT HAS BECOME MORE RELEVANT THAN EVER BEFORE.
Cost reduction
39%
SEIZE THE OPPORTUNITY THIS INCREASED VISIBILITY AND FOCUS PROVIDES TO HELP ORGANISATIONS BOOST RESILIENCE AND REDUCE RISK THROUGH A FORMAL APPROACH.
30%
Carry out supplier financial checks
28%
22%
Invest in supplier management technology
22%
18%
Localise supply chains
16% 16%
9 8
9 9
STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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