KY3P
Winning senior buy-in How to gain crucial investment into supplier management
Strong and active supplier management support leads to a multitude of advantages: increased innovation, improved competitiveness, lower costs and higher profits. We know this from 18 years of practice and 14 years of annual research. And the benefits don’t end there. Reduced risk is currently the number one motivation for investing in a Supplier Management programme (for 83%) and 59% see it as a means to boost supply chain resilience, our research has found. Organisations are starting to appreciate the vital role played by procurement and supply chain management in setting strategies that can help to prevent supply chain shocks or to withstand them if they hit. The importance of close, constructive relationships that comes from proper supplier management isn’t changing anytime soon. Hot on the heels of Covid, the world experienced the impact of the invasion of Ukraine, and now organisations are being hit with higher costs and an energy crisis. There should be no issue persuading businesses to set time and money aside for supplier management. For skills development, for segmentation exercises, market research, Voice of the Supplier surveys, and the tools and technology required to support and improve all these stages. Yet struggles persist. Alan Day: “Our research has shown that nearly 4/5 of organisations rely on supplier relationships to overcome supply chain risks or disruptions. Yet very few have supplier management programmes mature enough to be considered a ‘leader’. CEOs spend far too little time with and understanding suppliers. And, because of this, investment in supplier management – into technology, training and skills, and processes – remains low.”
And the problems don’t end there. Day says once procurement has persuaded the board of the business case for supplier management the hard work of convincing senior stakeholders begins. “Procurement needs to get its selling shoes on and demonstrate the value of investing time and budget in this area.” Here are four things to consider when building your business case for Supplier Management: 1. C-suite buy-in is crucial, without it, your programme is not likely to be successful. Get them on-board and ensure they themselves are invested in the programme. 2. Some programmes are not fully aligned to the organisation’s needs. Ensure there is a direct link between the main business drivers and the benefits reported. Link your proposition directly to the way your organisation defines value, and remember, nothing is as powerful as real examples. 3. Once you have had your business case approved by the board you need to translate it into a communications plan and sales pitch
that can be used to persuade business leads and heads of function to dedicate time, money and resources to these activities (see Value Proposition Communication Framework graphic). You can use the results of Voice of the Supplier research and ‘Current State’ assessments and diagnostics of current supplier management activities as vital input to that framework. 4. Evidence: Ensure any and all gains are recorded, not only those that relate directly to the top or bottom line. Anything from increased commitment; performance improvement; better supplier collaboration; reduced risk; increased sustainability or social value, should also be logged and reported on.
What Don’t You Know? Corporate leaders are increasingly exposed to constantly changing risks across their third-party networks.
Successful supplier management programmes provide a wealth of
advantages. If any more evidence were needed, consider the successes reported by the Leaders of this year’s study. In the meantime, as organisations focus on supply chain resilience, remind them that supplier management is key to possessing both the strength and agility to cope. Contact enquiries@stateofflux.com for help to make your case
Customers, regulators, and stakeholders expect immediate insight, intelligence, and confidence across a range of risk domains, including:
The ‘messaging house’ summarises project objectives, themes and ideals to allow for clear and concise stakeholder communication. To be used in conjunction with a communications plan and the 20:2:20 technique. Combining all the elements below could produce a 20-minute presentation. Value Proposition Communication Framework
Financial stability
Cyber security
Geo-political risk
Operational maturity
Sanctions
ESG and more.
S&P Global KY3P ® has a unique combination of best-in-class data, an award-winning platform, and leading risk management expertise to allow our customers to anticipate and manage those threats. We can help your business know more and navigate through the hazards while providing a competitive advantage.
Offers stakeholders a 20-second overview of the project’s vision. Your ‘elevator pitch’ Outlines 3-4 primary focus points of the project. Adding this detail in can turn your 20-second overview into a 2-minute message Highlights the major obstacles facing stakeholders
Hero message
Message focus points
Stakeholder challenges
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Outlines skills and expertise required to address challenges
Stakeholder needs
Provides experience and case studies to emphasise stakeholder benefits
Proof points
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