2022 SRM Research Report - Building Resilience

Critical and strategic suppliers Often overlooked when stakeholder maps are being created, the supplier stakeholder constituency is vital. No supplier management programme can exist without suppliers willing to engage and collaborate. The more suppliers are exposed to good practice supplier management, the more they are likely to embrace it. The perception that suppliers support supplier management programmes remains high, increasing from 75% in 2021 to over 80% in 2022. This level of support cannot be taken for granted, and all stakeholder engagement needs to be proactively maintained. Evidence that Leaders maintain better engagement with suppliers is evidenced by feedback that suggests 98% of their suppliers are supporters of their supplier management programmes. Meeting engagement It’s perhaps easiest to gauge the level of engagement from stakeholders through meeting attendance. Typically, the quarterly relationship or business review meetings that take place as part of most supplier management processes. Feedback this year amongst critical and strategic suppliers indicates engagement is positive in around 9 in 10 cases with very little resistance experienced. Amongst internal procurement colleagues, we also see good levels

of support. The engagement and support for these meetings at the senior management and executive level however could be improved. Lack of engagement at this level manifests itself in failure to attend, being distracted and sometimes leaving early, and too frequent delegation of

Critical and strategic suppliers support for Supplier Management programmes

Leader Follower Strong and active engagement & support 64% 37% 13% Supportive 32% Fast Follower

attendance. Challenges

58% 59%

While encouraging, obtaining the levels of support previously described is not without its challenges. When it comes to senior stakeholders, the most often mentioned challenge (by 72% of respondents) is the other business priorities that stakeholders are managing, followed by insufficient awareness of the value proposition/ business case. For internal procurement colleagues, the main challenge is workload – a lack of capacity to deliver a supplier management programme on top of their existing procurement role. A general lack of understanding as to some aspects of the value supplier management brings was also mentioned. When seeking to engage suppliers, the primary challenges are a lack of capacity combined with limited understanding and appreciation of the value to be gained.

Neutral 5% 4%

26%

Some opposition 2% 2%

Supplier feedback Effective supplier engagement relies heavily on communication. We all know that the best communication is a dialogue where both parties listen as much as they talk. With this in mind, we were interested to understand what techniques and tools are employed to gather feedback from critical and strategic suppliers and whether feedback is gathered at all. The responses revealed that of all the companies contacted during our research this year, just over 75% gathered feedback from their critical and strategic suppliers. When we look at Leaders and Fast Followers, this figure increases to over 90%. So, what form does this feedback take? Possibly as expected, the most frequently employed method of gathering feedback is through ad hoc and informal conversations. However, this is reported by a modest 49% of all respondents in contrast to 74% of Leaders. Only 31% and 59%, respectively, routinely document these conversations.

The most popular tool employed is the 360-degree feedback approach when gathering more structured feedback. This technique in its various forms is employed by 40% of overall respondents and by 70% of Leaders. In both cases, the majority of these are facilitated internally. Gathering feedback in this way provides a much better picture of relationships from both supplier and customer perspectives, but it is time-consuming. The less resource intensive but still useful approach of a one-directional questionnaire is still employed by just over 20% of respondents. Of these, the majority are conducted using internally developed question sets. However, just over 6% engaged a third party to run an anonymous survey and interviews with suppliers to measure what is important to them and how they compare with their suppliers’ other key customers. Leaders are three times more likely to use this approach than Followers. A point of concern is that almost 1 in 4 companies while reporting that they run a supplier management programme, do not gather feedback from their critical or strategic suppliers.

How have you gathered feedback from your critical and strategic suppliers on how they regard you as a customer in the last 12 months?

Leader

Fast Follower

Follower

18% 17% 360 degree feedback – Externally run 8% 43% 360 degree feedback – Internally run 17% 52% 73% Adhoc informal conversations with key stakeholders 48% 45% Documented conversations with key stakeholders 59% 45% 21% One-directional questionnaires 36% 11% 12%

What challenges impact Supplier Management support among your Senior Leadership team? (all respondents)

What challenges impact Supplier Management support among your internal procurement colleagues? (all respondents)

What challenges impact Supplier Management support among your critical and strategic suppliers? (all respondents)

Disagree with the concept 4% Insufficient awareness of the value proposition/business case 43% Other business priorities 72% Procurement and supply chain is not high enough on the corporate agenda 34% They see it as slow to implement and deliver benefits 22%

A lack of capacity to be able to deliver a Supplier Management programme on top of their existing procurement role

A lack of capacity to be able to deliver a SRM programme on top of their existing procurement role

46%

71%

Insufficient awareness of the value proposition/business case

Engaged a third party 11% 11% 3% No feedback gathered 9% 36%

43%

35%

They have little or no knowledge of the value an effective supplier relationship management programme can deliver to the business

They see it as slow to implement and deliver benefits

29%

4% Disagree with the concept

24%

They see it as slow to implement and deliver benefit

The more suppliers are exposed to good practice supplier management, the more they are likely to embrace it.

23%

6% Disagree with the concept