COLLABORATION
COLLABORATION
Results of increased collaboration
A total of 85% of Fast Followers report much improved collaboration, along with 44% of Followers, demonstrating that joint working can yield benefits early in the development of an SRM programme.
Shared goals and objectives and joint planning The simple definition of collaboration is the process of two or more people or organisations working together to complete a task or achieve a goal. While it sounds straightforward it can be hard to achieve without the requisite levels of trust and a helping hand. This helping hand comes in the form of shared goals and objectives and a joint plan to provide a fulcrum. For many organisations, however, collaboration has not yet developed to the point that any of these are in place. While 40% report that their improved collaboration with suppliers has resulted in shared goals and objectives, only just over 25% have converted them into a joint plan. This is an improvement on 2019 (17%) but shows there’s still a long way to go.
Leader
Fast Follower
Follower
More trust in the relationship
In 2020 the proportion of those reporting increased collaboration has increased to almost 60%, with a strong showing for ‘increased greatly’ at 16%. The number reporting no discernible improvement has halved to 3.5%. Leaders report the most positive feedback about improved supplier collaboration, although both Fast Followers and Followers are also positive. Benefits generated as a result of increased collaboration include building more trust, getting suppliers more engaged in continuous improvement and innovation, and developing shared goals and objectives. Leaders are almost twice as likely to be achieving this compared to Followers. While 40% of organisations report that they have shared goals and objectives with suppliers, only 25% have converted them into a joint plan. The position of companies as a customer of choice for their key suppliers seems to have changed little. Only 57% believe they are a customer of choice for more than half of their key suppliers. However, Leaders who have more developed SRM programmes put this figure at almost 80%. Around 45% of respondents conduct a 360 ° relationship health check as part of their SRM programme, amongst Leaders this figure rises to almost 86%. Increased supplier innovation is a key business driver for SRM, as detailed by 44% of organisations and yet only around half of these companies report it as a significant benefit. Summary
71%
58%
Some industry sector variation on collaboration
60%
Suppliers are more engaged on innovation and continuous improvement
According to feedback, the industry sector collaborating with its suppliers most is Consumer Goods followed by Financial Services. The group least likely to be collaborating is the Public Sector.
64%
57%
37%
We’ve established a better understanding of mutuality (more win-win outcomes)
Benefits of increased collaboration
48%
45%
Collaboration takes on many forms and isn’t constrained by the formal structures that are in place to manage the relationship. It starts to happen organically as behaviours change and more trust and openness is established. Feedback this year identifies a broad range of examples of collaboration and its benefits. It’s in the type of collaboration and the benefits reported where some variation between Leaders, Fast Followers and Followers starts to emerge. The areas where Leaders appear to have a distinct advantage is in building more trust, getting suppliers more engaged in continuous improvement and innovation, and developing shared goals and objectives.
38%
We’ve established a number of shared goals and objectives
53%
38%
31%
We are working together to reduce supply chain risk
40%
If too much in your relationship isn’t
38%
26%
Our internal executive stakeholders are more engaged
working as it should be, the chance of delivering on your joint goals and objectives is limited.
H ave organisations and procurement in particular reached a level of maturity where collaboration with critical suppliers is regarded as simply a better and more effective way of doing business? The approach adopted by companies as we move out of the Covid-19 pandemic crisis will go some way to revealing the answer. In 2019 we revealed that just over half of organisations were finding that improved collaboration achieved via their SRM programme was yielding both direct financial benefits and indirect or non-financial benefits. Almost half were optimistic but said it was too early to be sure about the value they had gained and a small proportion (7%) said they had seen no impact of SRM on collaboration. In 2020 the proportion of respondents reporting increased collaboration has grown to almost 60%, with a strong showing for ‘increased greatly’ at 16%.
The number reporting no discernible improvement has halved to 3.5%. However, it’s the more mature SRM programmes rolled out by Leaders where we see the most positive feedback about improved supplier collaboration. Of the Leaders, 98% report improved supplier collaboration, with 44% saying that it has increased greatly. That is not to say that improved collaboration can only be achieved from the most mature approach.
33%
37%
32%
98% OFLEADERSREPORT INCREASEDSUPPLIER COLLABORATION 40% REPORTHAVINGSHARED GOALSANDOBJECTIVES WITHSUPPLIERS 45% RUNAHEALTHCHECK TOUNDERSTAND IF RELATIONSHIPSAREFIT FORCOLLABORATION
We work more collaboratively on compliance with contractual SLAs/KPIs
31%
25%
Snapshot analysis
39%
Supplier executives are more engaged
Snapshot analysis
35%
When being a customer of choice was really put to the test during the coronavirus pandemic the feedback suggests that the assessment of 57% was a little on the pessimistic side. When asked to estimate what proportion of their key suppliers treated them as a customer of choice during the pandemic the feedback based on actual experience was more positive than some would have anticipated, at around 70%.
33%
3%
Unless the power of collaboration is channelled there is a risk that it becomes less focused and productive and is somehow regarded as an end in itself. While in some cases teams may form naturally around a challenge, task or opportunity, at other times they need to be created and given clear objectives and terms of reference.
We engage in more joint planning
33% 34%
19%
Collaboration starts to happen organically as behaviours change and more trust and openness is established.
76 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
77
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