STATE OF FLUX
Building for longevity
Cutting corners is not an option when setting up supplier management for longevity. There is, however, a streamlined approach which is focused on getting the essentials in place quickly, as shown below.
Approach: High Criticality, High Collaborative Value Opportunities (SRM + SPM + CM)
TIER 1
SUSTAINABLE EXECUTION DELIVERS: > Relationship management > Risk management > Performance management > Contract management
Approach: High Criticality, Low Collaborative, Value Opportunities (SPM + CM) Approach: Medium Criticality Low Collaborative, Value Opportunities (CM + MBE)
Voice of the Supplier
Value proposition
Diagnostic
TIER 2
TIER 3
Build Business Case
Segment for Purpose
Implement Treatment Strategies
Deploy Process and Tools
Formalising a consistent, repeatable, and standardised approach for the long-term Under normal circumstances, this phase converts the results of the previous stages into a comprehensive, fit-for-purpose supplier management framework. The framework must be supported by the necessary guidelines, tools, and processes. As you get through the crisis, build broader support for the new approaches and ways of working.
Applying selection criteria to put the right effort into the right supplier relationships Under normal circumstances, the aim of segmentation is to identify suppliers where performance improvement, risk reduction, and value release are priorities. A good segmentation approach is one that allows a balance to be struck across multiple drivers and also accommodates supplier perception of the customer as an account. In a crisis, the segmentation criteria becomes heavily biased towards the factors that are inherent to the crisis – risk management and market complexity factors for example.
Creating the case for change
Employing supplier engagement and management methods according to segmentation output Under normal circumstances , supplier treatment strategies are a logical extension of segmentation and will define how much systematic effort will go into implementing supplier management. In a crisis, to build at speed the treatment strategies will need to be applied selectively, with the priority on addressing the current situation.
Under normal circumstances, best practice is to: > Conduct an “as is” assessment > Collect Voice of the Supplier feedback > Develop a supplier management value proposition. In a crisis, the value proposition becomes self-evident (grounded in the experience of supply chain disruption, for example).
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COVID-19 SAFE SUPPLIER OPERATING STANDARD PART ONE
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