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Governance and process has seen the most improvement since 2012 for both leaders and followers.
Single point accountability for the development and implementation of SRM, is increasingly evident through the appointment of process owners. Close to 65% of respondents now have a single process owner with respon- sibilities including development and roll out of the SRM programme, process excellence, and senior stakeholder engagement. A very positive advance is that segmentation of the supplier base is now common practice for most organisations. More than eight out of ten respondents say they formally segment their suppliers. The variation in approach is now more to do with the criteria that are used and the number of segmentation tiers that are thought to be appropriate. The optimum number of suppliers being segmented into the top tier is between 11 and 25 according to over 60% of respondents. An increasing proportion of external spend is coming within the scope of SRM, with almost 60% of respondents reporting that more than half of their third party spend is covered by SRM. Developing SRM operating models appears to be making progress. Last year, this was one of the areas making the least progress. This year, over 50% of respondents report that progress is being made. However, it still remains a problematic area for many. The survey has sought to establish what proportion of respondents’ ‘key supplier’ group has robust contract and performance management in place. The feedback tells us that only 48% of respondents have effective contract management in place for more than half of their key suppliers. For performance management the figure is only 38%.
Highlights Single process owners are in place for SRM in 64% of organi- sations responding to the survey. Procurement hold the budget for SRM in half the compa- nies, but for one in three there is no specific budget. Spend, business criticality and supplier dependence are still the most widely used segmentation criteria. Almost one in five companies have over 80% of their third party spend covered by SRM. SRMis still seen as primarily a procurement activity, with it being executed fromeither a cen- tralised or devolved procurement function in about 75%of cases. The number of companies opt- ing for a dedicated SRM role has increased since 2012.
Governance and process best practice › › Suppliers have been segmented using multiple, weighted criteria. This was done in conjunc- tion with the business and is re-visited periodically. › › Treatment strategies have been aligned to the segmentation, designed to optimise value and investment of time and resource. › › Good practice, robust contract, risk and performance management is in place as part of the treatment strategies. › › A governance model has been agreed and populated, including a RACI for both parties. › › For most critical suppliers, an accountable executive for both parties has been appointed, and is actively and strongly involved in the relationship. › › The requisite supplier and internal meetings defined in the governance model are taking place, are well attended and delivering benefit. › › Governance and process is fully supported by an integrated technology solution.
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