Summary
The need for improved risk management and supply chain resilience is clearly indicated by them jointly becoming the most important business drivers for supplier management in the next 12 months. Despite the increased attention on supplier and supply chain management, developing and getting an agreement to a business case, with only 1 in 4 companies having a fully defined and documented business case for supplier management remains challenging. Linked to the business case is the ability to capture and report the value being achieved. Less than half the companies contacted during our research reported being able to capture and monitor the financial benefits being delivered. Where financial value is being reported, it is down by over half compared to previous years. Analysis of the alignment between identified business value drivers and the benefits delivered is a mixed picture. For example, sustainability lags when the business driver of improved risk management is largely delivered as a benefit.
now regard improved risk management as a key supplier management attribute. 83% are looking to supplier management to build more resilient supply chains. 59% of Leaders have developed their business case for supplier management. 82%
Business Drivers In the early years of conducting this research, when asked to list the most important business value drivers for supplier management, it was found that cost reduction was most frequently selected and was the basis for demonstrating a return on investment. Progressively this became balanced with a desire to drive more supplier innovation and improve risk management. This year we have seen clear blue water open up between cost reduction and innovation (65% and 62%, respectively) and improved risk management at 83%. Increased recognition of the importance of building supply chain resilience and perhaps its difference from pure risk management is reflected by 59% of respondents.
The most important business drivers for investment in implementing/ developing supplier management in the next 12 months (all respondents) 83% Risk management/reduction 65% Cost reduction/avoidance
Quality and service level improvement
64%
More supplier innovation and continuous improvement
VALUE The value of effective supplier management to organisations has been brought starkly into focus by the experiences of the last two years. What has been revealed is that supplier management has, and continues to be a lifeline in uncertain times.
59% Supply chain resilience 62%
Helping achieve your responsible business and
sustainability goals 57%
Improving your end customer
experience 51%
Improving your internal customer experience 45% Improving supply chain efficiency 39% Improving speed to market 30% Regulatory compliance 45%
Ask any organisation that has weathered the storm over the last three years about the value of a resilient supply chain.
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