The organisations in our survey are, on average, using more than 500 suppliers in total. Not all of these are in the strategic segment. Indeed, it is typically a very small percentage of an organisation’s supply base that is deemed strategic. The majority of the organisations, both in the Greek and global samples, have less than 50 strategic suppliers.
Figure 37: HOW MANY SUPPLIERS ARE RANKED IN YOUR MOST IMPORTANT (STRATEGIC) GROUP?
32.2%
11 - 25
30.8%
40.3%
31%
26 - 75
26.9%
27.3%
20.7%
Less than 10
32.7%
25.9%
10.3%
76 - 100
3.8%
2.2%
5.7%
More than 100
5.8%
4.3%
0
10%
20%
30%
40%
50%
Global 2010 SRM Followers
Greece 2011 Global 2010 SRM Leaders
Although spend should not be the sole factor in determining a supplier’s segment, it is typical that the aggregated spend of the strategic suppliers represents a big portion of an organisation’s overall spend. For more than half of the organisations (53.6%), top-tier suppliers account for 51%-75% of the total third-party spend, and for a fifth 76%-100%.
Figure 38: APPROXIMATELY, WHAT PERCENTAGE OF YOUR ANNUAL PROCUREMENT SPEND DOES THE GROUP OF THE MOST IMPORTANT (STRATEGIC) SUPPLIERS ACCOUNT FOR?
53.6%
51% - 75%
45.1%
33.8%
20.2%
76% - 100%
11.8%
14.4%
15.5%
26% - 50%
25.5%
25.9%
8.3%
11% - 25%
15.7%
19.4%
2% 2.4%
Less than 10%
6.5%
50%
0
10%
20%
30%
40%
60%
Global 2010 SRM Followers
Greece 2011 Global 2010 SRM Leaders
Effective supplier management Organisations should plan carefully which suppliers to keep at arm’s length and which to engage in collaborative relationships. According to our Procurement Building Blocks (see figure 1 on page 9) Supplier Management is a subset of category management. It starts with supplier selection, at the end of the sourcing phase and, depending on the importance of the supplier, they are then managed throughout the product/service delivery lifecycle using an appropriate mix of contracts management, performance management and relationship management.
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