2023 GLOBAL SRM RESEARCH REPORT
96
Making collaboration work – have you got a metric? We’ve already indicated that collaboration requires a number of inputs, such as having a compelling reason to do it (a business case), strong stakeholder commitment, a governance structure to give it purpose, direction and oversight, people who are trained in the art and science of relationships, and enabling technology. Its outputs are the benefits in terms of performance, risk management and value creation that all businesses are looking for. Given how important collaboration is, how can it be measured? The technique most often employed to both provide a metric and the information required to guide improvement is a 360˚ relationship assessment. 1 This technique is a feature of more mature supplier management programmes and is most frequently used by Leaders (92%) to assess the strength of relationships with critical and strategic suppliers, albeit with scope to expand to more suppliers. Gathering 360 feedback for critical and strategic suppliers? Leader Fast Follower Follower Less than 50% 15% 36% 49% 50% to 75% 34% 30% 19% 75% to 100% 45% 22% 12% No assessment 7% 13% 20%
The third most reported benefit is again a challenge to link directly to business outcomes. Still, there can be no doubt that extra commitment, where the supplier will go the ‘extra mile’, can make an enormous difference, particularly in a crisis. Follower Access to the suppliers best people and resources 76% 64% 32% Improved account management 72% 61% 46% More supplier executive focus and engagement 70% 61% 37% More commitment ‘the supplier will always go the extra mile’ 65% 54% 41% Preferential pricing 63% 57% 41% First look at innovation 59% 37% 19% Market insights and intelligence 56% 42% 33% Preferential access to scarce products, materials or capacity 44% 29% 21% Improved supply chain resilience 43% 29% 24% Customer of choice benefits Leader Fast Follower
Customer of choice for critical & strategic suppliers? Leader Fast Follower Follower Less than 50% 9% 31% 65% 50% to 75% 48% 46% 28% 75% to 100% 43% 23% 7% A closer look at customer of choice benefits While previously, it has been challenging to quantify the specific benefits associated with being a customer of choice, the experiences of the last few years should have made the task easier. However, it requires those sponsoring supplier management to help stakeholders connect the benefits indicated in the chart opposite and tangible business outcomes. The benefit most frequently reported by Leaders and Fast Followers is improved account management and executive focus, where 72% of Leaders and 61% of Fast Followers benefit as opposed to just 46% of Followers. It is most likely that this benefit will manifest itself as discretionary preferential treatment that is not covered by the contract. Next among the reported benefits is the more tangible, preferential pricing, reported by 63% and 57% of Leaders and Fast Followers, respectively. While not always a benefit that can be directly attributed to supplier management – as it most often features as a procurement saving – it is undoubtedly made possible by a strong relationship and being regarded as a customer of choice.
“There can be no doubt that extra commitment, where the supplier will go the ‘extra mile’, can make an enormous difference, particularly in a crisis.”
360º assessment Improve supplier relationships through a structured process, leading to increased productivity and collaboration.
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1 To be regarded as a 360˚ assessment, the approach must include gathering feedback from both internal and supplier stakeholders.
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