SUPPLIERSASA SOURCEOF INNOVATION
As one of the world’s largest privately owned businesses, Mars Incorporated is proud of its reputation for ethical business. While it spends billions of dollars on products and raw ingredients, across its chocolate, petcare, food, drinks and other business units, it aims to live by its five principles: quality, responsibility, mutuality, efficiency and freedom. The combination shouldmake it massively popular with suppliers, so it was a disappointment whenMars found many of themdid not share this image of the company.
Defining and developing a supplier relationship and a new performance- management approach was not only important to meet company values, but also critical to future business growth. “We recognise that our top line growth will also need to come from working with suppliers that offer innovation. It is not just better relationships for no purpose. We are a consumer-based organisation and we want to leverage external innovation through the right partners. What is critical is that resources are constrained: we cannot have an open innovation pipeline. You have to take care in choosing who you work with and define how you work with them in more detail. You can only do that by becoming a customer of choice to the right suppliers,” says Phillips. As well as meeting these business goals, Mars also wants to help suppliers work towards environmental and ethical goals. For example, Mars is dependent on dairy products for chocolate and proteins in pet foods. But dairy is a massive contributor to global warming. “In the commercial function, we are wrestling, not just with price, quality and cost, but also our desire to protect the planet. We need to create a business that is sustainable and ethical,” he says.
A voice of the supplier survey of Mars’ top 200 suppliers, representing 80 per cent of its external spend, revealed how they felt. “Our suppliers said we don’t listen, we don’t make decisions quickly and we are not working to mutual benefit. Given that being mutual is one of our principles that was disappointing. It was not where we wanted to be,” says Mark Phillips, supplier performance and relationship management (SPRM) programme lead at Mars.
Our suppliers said we don’t listen, we don’t make decisions quickly and we are not working to mutual benefit. Given that being mutual is one of our principles that was disappointing. It was not where we wanted to be.” Mark Phillips
Supplier Performance and Relationship Management (SPRM) programme lead
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