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visibility of any SRM programme. The system acts like ‘air traffic control’ for procurement, enabling them to look across it to see who is doing what when. Redirecting as required and enabling ‘safe landings’ when problems occur. Both the supplier and buyer have a clearer idea of what each other is doing, which helps to provide clarity and prevents over-reliance on a sole individual looking after a relationship and keeping everyone informed. Having a clear, structured approach ensures consistency for all, and from that point collaboration starts to grow, which helps businesses identify opportunities as well as issues. If you have information that’s updated in real time you respond more quickly. Organisations that implement or improve supplier management and then come to technology later tend to resist further changes, so it’s best done concurrently. There is also otherwise a risk that technology designed for a small number of suppliers may fail to support the larger number, which puts the whole programme in jeopardy. One State of Flux point of difference is that our technology looks at everything through an account management lens to get the best out of that supplier relationship. It reflects the supplier management treatment strategies that a good segmentation approach should generate. It allows you to switch on more collaborative functionality for strategic suppliers while automating data collection and reporting for those at the more transactional level.
Technology – speed up data gathering and information management The Value Accelerator method gets companies started, but to make it as efficient as possible, technology is required to support the process from the get-go. One of the challenges with any new company-wide programme is cultural and behavioural change. Technology can provide a catalyst for change and if you use it from the start, people only need get used to a new way of doing things once. And testing out a new platform with a small number of suppliers and stakeholders during the Value Accelerator phase will help ease a wider roll-out. So, put in the technology and use it as an enabler. It’s especially useful in the current restricted global environment because the connectivity it provides and the sharing of information enables us to move quickly. Once success has been achieved with the initial cohort of suppliers, it will be necessary to regroup and decide how to tackle the next half dozen and so on. It won’t be manageable to rely on spreadsheets going forward, so it makes sense to adopt technology early on. You need to keep incorporating new suppliers and stakeholders, and draw in more commodities or categories. That way, every few weeks you are delivering another six plans. To ramp up progress, you’ll need to make the case for investment in technology and training. You may begin your SRM programme with four or five key suppliers in the first 12-16 weeks; but by investing in resources you may be able to do 15 or so more in the following 16 weeks. Once the case is made, work can happen simultaneously rather than sequentially. If you invest in training, technology and support you’ll get more people to work this way more quickly. State of Flux has a software platform that hosts contracts and manages supplier relationships. It enables businesses to capture and share information about suppliers internally. It’s also used to report on and manage risk, performance, contracts and more, acting as a repository, innovation portal and search tool, and giving overall
The case for speed
Adam Fridman, entrepreneur founder of US-based digital branding agency Mabbly, says speed is everything in business. Making the case in Inc magazine, Fridman says it’s difficult to overstate its importance, because: > If you’re not fast, your competitors will be; > Audiences have come to expect near instant gratification; > The faster you learn, the quicker you evolve; > Moving at pace creates a culture of speed. “No company in any industry can expect to get ahead with a slow culture; by design, entrepreneurship is all about moving forward and pushing innovation forward.”
State of Flux procurement training curriculum State of Flux has developed a training curriculum for all aspects of procurement and supplier management.
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training, businesses can apply ‘nudge theory’. This is about making the desired action an easy, obvious, natural thing to do. Popularised by the authors of Nudge, Richard Thaler and Cass Sunstein argue that, for instance, more people might succeed in achieving a desired weight loss if they made a financial and public commitment to do so. And that more of us would give to charity or become organ donors if we had to opt out of doing it, rather than being required to opt in. It’s about helping to change behaviour – like encouraging people to wash their hands more often – by not only telling them why but by ensuring there are adequate hand washing facilities available. In the case of SRM, you can encourage people to be more collaborative and open by showing them the value of it, but to make the change easier it’s important to also give them an effective process, the technology and training to make it simple. Ultimately, people want to do the right thing, all it takes is a nudge.
People – skills need to keep pace with change
Segmentation enables organisations to deploy people where they will make the most difference – working with the strategic end of the supplier base. Technology ensures the lower value work they leave behind can be largely automated. To maximise the effectiveness of people redeployed to spend more time with strategic suppliers, State of Flux has developed a training curriculum for all aspects of supplier management. When the delivery of this curriculum in a single physical location was disrupted by Covid-19 we rapidly switched to a virtual classroom. Progress need not be halted. In fact, it can be expedited because it avoids the delays that can occur in obtaining venues or getting groups of people together in one place.
Contact log
The Covid-19 pandemic has served to highlight an added benefit of supplier management systems – the ability to track interactions with suppliers. Knowing who and where your suppliers are helps businesses react quickly and make informed decisions. And tools like the platform offered by State of Flux, can also effectively provide a contact-tracing log. If there’s an outbreak or issue you know who at your organisation suppliers have been in contact with.
Success with supplier management is when it’s no longer seen as a separate business change, but just the way you do business. State of Flux 2020
The time for making a business case for supplier management should be in the past: It’s now imperative organisations just do it. State of Flux 2020
Sometimes all it takes is a nudge
By putting an effective process in place and supporting it with technology and
6 STATE OF FLUX
2020 GLOBAL SRM RESEARCH REPORT
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