Figure 40: WHICH OF THE FOLLOWING ACTIVITIES / INITIATIVES HAVE YOU IMPLEMENTED FOR MANAGING YOUR SUPPLIERS?
Share information with suppliers Assess the performance of suppliers
71.9%
66.3%
Work jointly with suppliers on cost-saving initiatives
62.9%
Invest in increasing the degree of collaboration and innovation with suppliers Schedule regular meetings with suppliers Work jointly with suppliers on mitigating supply chain risks Assign supplier managers to key suppliers Develop supplier management governance and processes Request formal feedback from suppliers regarding your performance
60.7%
56.2%
29.2%
23.6%
18%
18%
Measure the benefits delivered by supplier management
15.7%
Design a supplier management programme
14.6%
Conduct 360-degree feedback surveys Conduct training in supplier management
13.5%
5.6%
70%
0
10%
20% 30% 40% 50%
60%
80%
A positive finding is that more than 6 out of 10 organisations have been working collaboratively with their suppliers on either joint cost-saving initiatives (62.9%) or innovation (60.7%). However, only half as many organisations collaborate with their suppliers to manage risks in the supply chain (29.2%). We also note that the majority of the organisations in the survey do not consult their suppliers, a finding which has been highlighted earlier in this report. This is concerning. During frequent conversations with suppliers to our clients, they often tell us that they have plenty of ideas about how to improve supply chain efficiency, reduce costs and risks, or contribute innovation but they are seldom heard or encouraged by their customers. On the other side, customers complain that suppliers are not strategically aligned to their organisations and that it takes a lot of time and resources to maintain the value they get from suppliers. Only about 2 in 10 (18%) organisations ask for feedback from their suppliers, and even fewer (5.6%) conduct a 360-degree exercise where multiple stakeholders from both the customer and the supplier organisation provide feedback on the relationship between the two parties. The danger here is that those same suppliers give your competitors priority access to innovations, their most valuable resources and critical supplies or production capacity in the event of disruption in the supply chain. And in terms of financial benefits, respondents to State of Flux’s global survey on SRM in 2011 typically reported 2-6% annual savings from their SRM activities with key suppliers. So there is a lot to be gained from engaging in collaborative relationships with suppliers. Sharing information with suppliers The most popular supplier management activity, according to organisations in the survey, is sharing information with suppliers. Almost two-thirds (64.4%) share information about the future product/service needs of their organisations, followed by 63.2% who share information about the marketplace and 52.9% who communicate information about suppliers’ performance.
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