SECTION 3 - SUPPLIER MANAGEMENT
The focus of the previous section of this report was the management of categories of products and services. Organisations are increasingly relying on suppliers or outsourced partners for the make-up of those products and services, and hence there needs to be a comprehensive approach to managing them.
Supplier Management involves the development of supplier relationships in alignment with a supplier segmentation strategy.
“You are only as good as your worst supplier” (State of Flux SRM Survey 2009) holds true for all organisations, since more than ever suppliers have an effect on competitiveness. Effective supplier management yields numerous benefits, from ensuring the quality of supplies and continuous improvements to accessing innovation early and becoming a ‘customer of choice’. We have been working in the field of supplier relationship management (SRM) for a number of years, and an aspect of this work is the global SRM survey that we run annually. This gives us the opportunity, in this section, to look at how the results of our Greek survey compare with the results of our global sample. The responses of the State of Flux SRM survey are filtered by those organisations that employ more advanced supplier management practices (the ‘SRM leaders’) and those that are less mature in this area (the ‘SRM followers’). Throughout this section, where possible, we will compare the responses of Greek organisations with those of the global SRM leaders and SRM followers. Supplier segmentation Organisations typically purchase products and services from between a few hundred up to tens of thousands of suppliers. Obviously, not all suppliers are equally important to an organisation; nor do all suppliers require the same level of management and attention. The cornerstone of effective supplier management is supplier segmentation. Supplier segmentation is the process of categorising suppliers in accordance with their strategic importance. It ensures that investment and resources are allocated to where they will generate the most value.
Eight out of 10 (79.8%) survey respondents said that they segment their suppliers into different categories, compared to 84.4% of the global SRM leaders and 65.6% of global SRM followers.
Figure 34: HAVE YOU SEGMENTED YOUR SUPPLIERS INTO DIFFERENT GROUPS ACCORDING TO HOW IMPORTANT THEY ARE FOR YOUR ORGANISATION (E.G. STRATEGIC, PREFERRED, APPROVED AND CRITICAL)?
79.8%
Yes
84.4%
65.6%
19.1%
No
12.5%
31.2%
1.1%
Don’t know
3.1% 3.2%
60%
70%
80%
0
10% 20% 30% 40%
50%
90%
Global 2010 SRM Followers
Greece 2011 Global 2010 SRM Leaders
50
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