34
When comparing leaders and followers, we see a pattern of benefits that looks very similar, apart from the vital fact that a far greater proportion of leaders are reporting the benefits compared to followers. In addition, some major differences emerge, such as leaders are far more likely to be benefiting fromsupplier innovation . Leaders are around twice as likely to be benefiting in the areas of improved sustainability and CSR , access to best supplier resource , and joint product or service development .
■ LEADER ■ FOLLOWER
Figure 1.3. Tangible benefits reported from SRM programmes – leaders and followers
RISK REDUCTION COST AVOIDANCE COST REDUCTION
RISK REDUCTION COST AVOIDANCE COST REDUCTION
1
1
END CUSTOMER EXPERIENCE FASTER SPEED TO MARKET SUPPLY CHAIN EFFICIENCY IMPROVED PROFIT MARGINS SALES / REVENUE GROWTH INNOVATION
END CUSTOMER EXPERIENCE FASTER SPEED TO MARKET SUPPLY CHAIN EFFICIENCY IMPROVED PROFIT MARGINS SALES / REVENUE GROWTH INNOVATION
SUSTAINABILITY AND CSR COMPLIANCE TO CONTRACT PREFERRED ACCESS TO SCARCE CAPACITY / MATERIALS SERVICE LEVEL IMPROVEMENTS QUALITY IMPROVEMENTS
SUSTAINABILITY AND CSR COMPLIANCE TO CONTRACT PREFERRED ACCESS TO SCARCE CAPACITY / MATERIALS SERVICE LEVEL IMPROVEMENTS QUALITY IMPROVEMENTS
2
2
3
3
4
4
JOINT PRODUCT / SERVICE DEVELOPMENT ACCESS TO THE BEST SUPPLIER RESOURCE
JOINT PRODUCT / SERVICE DEVELOPMENT ACCESS TO THE BEST SUPPLIER RESOURCE
10% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
Figure 1.4. Average post contract financial benefit reported as a result of SRM – buy side
Turning a ‘sense’ of value into a reportable financial benefit remains a challenge for SRM, although indications fromour research suggest that it’s less of a barrier than in the past. Financial benefits reported are subject to many variants in terms of how organisa- tions calculate report and apportion benefits. Nonetheless, the indicators of strong finan- cial return on investment remain, with almost 25% of respondents reporting post contract SRM benefits of 6% or more .
0 2% 2 4% 4 6% 6 8% MORE THAN 8%
1
DON'T KNOW 0%
0% 5% 10% 15% 20% 25% 30% 35%
When the reported benefits are split between leaders and followers it becomes evident that, as we noted last year, the difference between leaders and followers is increasingly being defined by outputs rather than inputs. What is also evident is the high proportion of companies that are unable to track financial benefit.
Figure 1.5. Average post contract financial benefit reported as a result of SRM – leaders and followers
■ LEADER ■ FOLLOWER
MORE THAN 8%
68%
46%
24%
02%
0%
DON'T KNOW
0% 5% 10% 15% 20% 25% 30% 35%
% OF RESPONDENTS
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