ENGAGEMENT
ENGAGEMENT
p44-47). It can also help build a case for change, raising executive awareness of supply-side dependencies, risks and opportunities enhancing the case for change. Finally, if the feedback is properly structured and analysed it provides measured data and the ability to baseline supplier relationships and track progress. Currently just 39% of organisations report having gathered this type of information. For Leaders this figure exceeds 75%. A good indicator that supplier feedback and engagement is a solid foundation for building better relationships.
Some industry sector variation on business and operational support
Support from business and operational teams
opinion State of Flux
Manufacturing and Automotive is the stand out industry sector when it comes to engagement and support from their business and operational colleagues. They claim 75% are supportive. It’s possible that this is related to the benefits of SRM in this industry sector being somewhat easier to quantify. This performance compares to the next best sector being Consumer Goods at 58%.
Leader
Fast Follower
Follower
Strong and active engagement and support
29%
14%
3%
Supportive
56%
61%
37%
Supplier support
Neutral
The last, but by no means least, of the stakeholder constituencies to be considered are suppliers. After all, what is an SRM programme without suppliers that are willing to engage, collaborate and embrace change? The perception that suppliers are supportive of SRM remains relatively high at 75% for all respondents. While certainly not to be taken for granted this figure can be validated by feedback from Leaders who have more mature SRM programmes and will have engaged with suppliers over a longer period. Amongst Leaders 97% say that suppliers are supportive. From this we can conclude that supplier engagement and support is likely to increase as the programme matures and they see genuine change taking place. A precursor to supplier engagement, as part of an SRM programme, is often to reach out to a wider group of suppliers to understand how you are perceived as a customer and how your general approach to supplier interactions are received. This relatively simple tool is still under-utilised as a change lever. When used effectively it has a number of benefits including its positive impact on general supplier relationships because the simple act of seeking feedback has a good effect. Longer term, relationships improve and operational interactions can be made more efficient. Companies also gain insights and improve their understanding of relationships with suppliers from their perspective. It also identifies areas where action will result in positive outcomes for supplier relationships enabling companies to move closer to ‘customer of choice’ status (see feature,
Engagement seems to be the pillar where the difference between Leaders and other companies is most pronounced. This surely has to be the cue for aspiring companies to create more effective engagement with each of the key stakeholder constituencies. It starts with engaging the leadership teamwith the value proposition. Timing is important as is getting the message right to ensure that it is in step with the business as it moves through different phases where priorities and focus might change. For example, in a fast-paced business world an organisation can find itself rapidly in more challenging environment requiring the value proposition to be ‘fine-tuned’ and the stakeholder messaging adjusted. Current levels of support from business and operational
Some industry sector variation on supplier support
11%
17%
44%
Manufacturing and Automotive is once again ahead of the field reporting that general supplier support for SRM programmes stands at 80%.
Some opposition
2%
6%
15%
Some regional variation on general engagement
Engagement in general (across the three stakeholder constituencies) reveals that North America appears to be achieving the best level of engagement at 70% compared with Europe at 67% and Australasia at 60%.
colleagues has been stuck between 55% and 60% for a number of years and is in danger of undoing the good work to increase backing from senior stakeholders. This could result in the programme ‘stalling’ when it comes to implementation, leading to a loss of momentum and confidence in the programme to deliver real and sustainable change. In working with clients we’ve addressed this in a number of ways including the recruitment of business and operational representatives into the project team to act as advocates for SRM in their business area.
The more mature SRM programmes of Leaders are built on a foundation of good performance, contract and risk management.
Snapshot analysis
Of the 39% of companies that have gathered feedback from suppliers a relatively high proportion would have conducted this activity themselves. While the intent is to be commended the anecdotal feedback suggests that the end product can be less useful than anticipated. Many suppliers will still be reticent about providing full, honest and frank feedback that could be construed as critical. The alternative is to use an independent third party to anonymise feedback and identify key themes and messages.
While sometimes not regarded as equal stakeholders in SRM, suppliers are nonetheless crucial to its success. Even in relatively mature programmes engagement can be inconsistent and trust can be an issue. Attempts to reach out and gather feedback can be hampered by a lack of trust when suppliers conditioned by past experience can take the view that “they’ll use this against us”. This is where a 360° relationship assessment plays an important part in revealing the true nature of the relationship and enables the building of trust to begin. Learn more about how State of Flux conducts a 360° assessment on our website.
In a fast-paced business world an organisation can find itself rapidly in a more challenging environment requiring the value proposition to be ‘fine-tuned’ and the stakeholder messaging adjusted.
34 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
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