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GROUP COMPANY B Key business objectives
We maintain that the alignment of SRM to business drivers is essential to ensure the effort invested in SRM has the largest and most direct impact on busi- ness performance. Creating an SRM value proposition is vital to creating alignment with the business. Once created, the value proposition needs to drive the development of the SRM approach, including supplier segmenta- tion and the kind of activities that will be included in the SRM programme. Aligning SRM to business drivers must initially take place in two steps. Firstly, in cases where the SRM approach is being developed for a company that has multiple group entities, business units or major functions, the SRM value proposition needs to be ‘tuned ‘ to these. Based on a thorough understanding of key business objectives, the value propo- sition will align the value SRM can deliver to each of these. It will not be the same for all entities. Secondly, the value proposition needs to be ‘fine tuned’ to reflect where the company is on the business cycle, to again ensure that what SRM is focusing on is what the business really needs at the time.
FUNCTION C Key business objectives
GROUP COMPANY A Key business objectives
FUNCTION D Key business objectives
SRM VALUE PROPOSITION
STRATEGY PRODUCTIVITY COST REDUCTION INNOVATION INITIAL TUNING
B
THE BUSINESS CYCLE
SRM VALUE PROPOSITION
B
STRATEGY PRODUCTIVITY COST REDUCTION INNOVATION
THE BUSINESS CYCLE FINE TUNING
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