About State of Flux
...SCALE AND GROW THE VALUE
The Supplier Management Journey The Supplier Management Journey, illustrated below, is designed to provide a comprehensive process to navigate your way through developing and implementing a successful supplier management programme.
Achieve ROI
Deliver Supplier Management at Speed ...SET UP AND RUN
Deliver measurable value release Increase supplier commitment and access customer of choice benefits Demonstrate the case for scaling and evolve to BAU
and Our Research
ENGAGE IN VALUE RELEASE External focus - supplier engagement and collaboration
Value Proposition Development ...CREATE THE BUSINESS CASE
360 relationship reviews
Joint business plans and collaborative working
Quick win delivery and SM programme management
WE HELP OUR CLIENTS TO...
BUILD FOR LONGEVITY Internal focus - people, process, and technology
About State of Flux Founded in 2004, State of Flux is a global procurement and supply chain consultancy with offices in Europe, North America and Australasia. With an approach rooted in the Six Pillars of Supplier Management model, we provide our clients with supplier management, procurement advisory and consulting support, training solutions and supplier management- specific technology through our SupplierBase platform. By establishing excellent working relationships, we draw on our practical experience and supplier management research findings to support organisations across geographies, industries, and sectors to help them achieve maximum value. About our research The State of Flux’s global supplier management research is in its 14th year. In that time, we have gathered and analysed more insight and data about global supplier management than anyone else in the field. In addition to providing insight across the Six Pillars of Supplier Management, each year’s report examines a specific
• Leaders are those companies that we believe, based on their responses to the questions posed, have developed more mature and successful supplier management programmes. • Fast Followers are those who have shown strong evidence of supplier management development. • Followers are organisations with
theme. The focus of this year’s study is resilience. The survey conducted between May and July 2022 includes feedback from 424 respondents representing 304 companies across continents, and from more than a dozen global industries. This year’s question set not only enables a direct comparison with previous years to investigate trends, it also incorporates some new questions pertinent to contemporary issues facing the discipline of supplier management and those within it. Complementing the report’s analysis are features exploring different elements of resilience, expert interviews and case studies from organisations in the US, Europe and Australasia, including Kellogg’s, Telstra, Chevron, Pressio, Thames Water, Ministry of Justice, Wellington Electricity and Air Products. Maturity and benchmark analysis In addition to providing an overall view from survey respondents, we also differentiate between three levels of maturity to provide an additional layer of insight.
Client-specific SM value proposition development Defined and validated value objectives Business case for change Roadmap and action plan Value proposition elevator pitch Form Steering committee
VALUE
Six Pillars benchmark exercise Value Opportunity Diagnostic ...EXPLORE THE OPPORTUNITY
SM policy, process, operations, and governance models
Segmentation and treatment strategies
Team capabilities / responsibilities
ENGAGEMENT
GOVERNANCE
PEOPLE
TECHNOLOGY
COLLABORATION
Business strategy/ value alignment assessment Spend data and opportunity analysis Voice of the Supplier research
limited supplier management ambition and/or are simply at the start of their supplier management journey.
Based on our best practice “Six Pillars of Supplier Management” model, the approach consists of four phases.
Phase 2: Value Proposition Development Activities • Create the supplier management value proposition for your business. • Develop the business case. • Develop the communication strategy. Phase 1: Value Opportunity Diagnostic Activities • Supplier management diagnostic exercise using our benchmark tool. • Process documentation and technology review. • Create a supplier management strategy. • Conduct a ‘Voice of the Supplier’ survey.
• Plan to implement accelerated value release and relationship development activities with selected suppliers. • Validated and prioritised value release initiatives. • A structured analysis of the relationship and joint workshop validated actions. • Supplier management framework, process and technology solution supported by people development and training. Output • A documented value proposition that has a clear line of sight between your company objectives and supplier management. • A documented business case using a wide range of value to demonstrate a strong ROI. • Communication materials and support with stakeholder engagement. Output • A structured analysis of the current state of supplier management in your organisation. • Process and technology gap analysis and prioritised road map. • A strategy for developing supplier management capability. • A detailed analysis of your supplier’s perspective on you as a customer.
Benefits • Creates momentum and an early indication of value. • Tangible value delivery that shows an ROI and supports the wider programme. • Improves the relationship to provide an ongoing vehicle for value creation. • Supplier management capability is developed in parallel to the pilot rollout to ensure a quick transition to full deployment. Benefits • Identifies value opportunities that will resonate with stakeholders and build support. • Value and ROI is clearly articulated to support stakeholder engagement and approvals. • Standard communication materials that provide effective and consistent messaging. Benefits • Clear understanding of strengths, weaknesses and organisational maturity. • Informs the supplier management development strategy. • Focus and clarity on value drivers which support stakeholder engagement. • Identifies factors that are inhibiting smooth supplier interactions.
Global supplier management maturity is assessed based on feedback from all 424 respondents to questions aligned to the Six Pillars of Supplier Management. Based on the results they are then arranged in four groupings (Leaders, Fast Followers, Followers and all respondents). There is a four-level maturity scale ranging from Undeveloped and Developing, to
Established and Advanced. The strongest pillar overall is
surprisingly Technology, where the average score for all respondents is just over 55%. This is followed closely by Engagement, with a score of 53%. The least developed pillar this year is Collaboration, with an average score for all respondents of just 29%. Leaders are clearly more mature across all six pillars with the biggest advantage achieved in Value followed by Governance. As well as presenting our findings here, we offer respondents an unparalleled review of their supplier management practices. As a result, we can provide them with a summary of their responses to the questions posed across the six pillars and offer unique insight into how their performance compares to those identified as Leaders, their industry peers, and other regional comparisons.
Global Supplier Management Maturity
Phase 3: Deliver Supplier Management at Speed Activities • Pilot implementation plan. • Facilitated value release process. • 360° relationship assessment and joint workshop. • Supplier management capability development. • Segmentation and treatment strategy development • Policy process, operational governance models Output
Leaders
Fast Followers
Followers
All respondents
Phase 4: Achieve ROI Activities • Implementation planning. • Ongoing implementation support.
Output • An agreed and resources implementation plan. • Ongoing training synchronised to the implementation plan plus facilitation support for value release and 360° relationship assessments.
Benefits • Phased rollout keeps pace with resource and funding. • Delivers ROI including: – Reduced risk and supply chain resilience – Cost reduction and avoidance – Continuous improvement and innovation – Quality and service improvement
Value
Engagement Governance
People
Technology Collaboration
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