87
POCKETS OF ACTIVITY While conversations are generally about what is not happening, the survey suggests that a significant number (just over 85%) believe there will be an increase in importance and activity in the next 12 months.
Figure 3.15. Importance of SRM in the next 12 months – rest of world (ROW) and Australasia
■ MUCH MORE IMPORTANT ■ MORE IMPORTANT ■ REMAIN THE SAME ■ LESS IMPORTANT ■ MUCH LESS IMPORTANT
GLOBAL EXCL. AUSTRALASIA
AUSTRALASIA ONLY
0% 20% 40% 60% 80% 100%
It is possible businesses could be on the cusp of change, or like the Qantas example below, there are pockets of SRM happening but it is not yet embedded across the organisation.
“Without recognising it asSRMat the time, QantasandTelstra recentlyadopted good ‘SRM behaviours’ to help turn around a challenging situation for both sides. The key nowwill be adopting these practices across the business.” – PETER MCDONNELL, HEAD OF SRM AT QANTAS This is a good example of where, in a specific instance, elements of the framework were adopted. Stakeholder engagement increased out of necessity, some improved governance was implemented and people with the right skills were engaged. CULTURAL SHIFT While the sourcing process pits two businesses against each other constantly manoeuvring to get the best outcome for their business (or their own personal performance targets), if the behaviour continues post contract it often results in failing supplier relationships due to an inability to find common ground. Once the terms of the contract have been agreed, we need to transition into defining the ‘relationship characteristics’. When these are collaboration and trust, we see the highest return for people’s investment. The data shows that 40% of Australasian respondents primarily focus on collaborating with their key suppliers. This is only slightly behind the circa 50% who are doing it globally. Whether it’s the need to compete on a global level with bigger businesses or nationally in a smaller supplier pool, culturally businesses are recognising the need to collaborate to generate greater value from their supply base.
Figure 3.16. Primary focus of SRM programmes – ROW and Australasia
■ Managing supplier contracts to ensure that negotiated terms and service levels are adhered to ■ Defining and monitoring key performance indicators (KPIs) to ensure that suppliers deliver services as per the contract and that they also deliver continuous improvement ■ Collaborating with key suppliers to jointly deliver value (cost reduction, risk reduction, innovation, etc.) that is beyond contractual obligations
GLOBAL EXC AUSTRALASIA
AUSTRALASIA ONLY
0% 20% 40% 60% 80% 100%
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