COLLABORATION I
17% of leaders greatly benefit fromsupplier innovation 29% of leaders see organisational complexity as a barrier to supplier innovation 50% of leaders have a process in place for supplier innovation
SUMMARY What sets SRM apart from the more traditional approach to supplier management is its support of collaboration with suppliers. Working jointly to solve problems in process, harness new technology, or innovate can drive competitive advantage. However, collaboration can have a lower-level impact too. A key factor in encouraging collaboration is to become a customer of choice to suppliers by easing the administrative burden of doing business and showing openness to new ideas. However, almost half of respondents say they are a customer of choice to less than half of their most important suppliers. Effective SRMmakes commercial discussions more constructive, as both parties are prepared to take a long-term view. Leaders are putting more effort into developing collaboration with suppliers. They are more than twice as likely as followers to have created joint account plans with their key suppliers. Every organisation in the leaders group is actively seeking innovation, and they are more likely than any other group to get it. Among leaders, 17% report they greatly benefit from supplier innovation and 38% report that benefits have been creditable. The biggest barrier to supplier innovation is a lack of time and resource, followed by the absence of a process and organisational complexity.
COLLABORATION IMPROVES AS A RESULT OF SRM
Fig 38 . As a direct result of your SRMprogramme, which of the following aspects of the relationship with suppliers has noticeably improved in the last 12months?*
Collaboration
Reduced supply chain risk
%
66
28
Mutual trust
Post-contract financial value
45
24
Continuous improvement
Innovation
36
23
Compliancewith contract SLAs / KPIs etc.
Post-contract non-financial value
34
20
Supplier executive engagement
Improved regulatory compliance
34
17
Joint planning and shared objectives
CSR / sustainability engagement
33
13
Many organisations say they want to collaborate with suppliers to innovate and gain a competitive edge. But are they willing to put in the hard work? Are they able to help suppliers understand what they will get out of it? Collaboration does not spring instantaneously from a commercial deal. It takes time and investment to get the relationship right before both parties can start sharing ideas and working towards shared goals. Collaboration is the most common behavioural improvement resulting from SRM reported by respondents to our survey. It is important because SRM should not be judged only on the hard, financial benefits but also on changing relationships that lead to other positive outcomes. The next key ingredient for success highlighted here is the perceived improvement in trust.
leaders, followers and others. However, leaders were more likely to be reporting improved executive support and more supplier innovation from SRM.
Disputes and escalations
Mutuality
29
10
Internal executive engagement
Improved your company's competitive advantage
SRMMAKES COMMERCIAL INTERACTION EASIER
28
10
Negotiations have always been the point in a relationship where the adoption and commitment to changed behaviours comes under the greatest pressure. Around 30% of overall respondents do not report any change or don’t know. However, only 5% of leaders and followers say the same. The most positive impact of SRM is that discussions are more constructive, both parties are prepared to take a long-term view and better outcomes are achieved by both parties. The next step after easing commercial interactions is to move to higher-value prizes such as innovation.
Effective and efficient governance
Other (please specify)
28
12
*This analysis is for all respondents.
Evidence of improved collaboration through SRM was consistent across the
82 COLLABORATION STATE OF FLUX 2017 GLOBAL SRMRESEARCHREPORT
83 COLLABORATION STATE OF FLUX 2017 GLOBAL SRMRESEARCHREPORT
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