VALUE
Innovation slips down the list of non-financial benefits Non-financial benefits reported (all companies)
services (over 55%) is that regulatory compliance is better assured. Second to the reduction in supply chain risk are improved service levels, cited by one in three respondents. Improved service levels will also have a positive impact on other key business drivers including end and internal customer experience. The third and fourth most often reported non-financial benefits are improved account management and a generally increased level of commitment on the part suppliers who are part of SRM programmes: in effect, ‘oiling the wheels’ of a relationship. It remains the case that too many SRM programmes fail to deliver innovation as a non-financial benefit. Only around 12% of respondents are reporting increased engagement with suppliers on this objective. SRM leaders and fast followers fared better since 44% report a benefit in innovation, but the result shows the potential of SRM to support business innovation is left unfulfilled.
are vying for the top-spot in terms of financial benefits. Around 25% of respondents from both sectors report financial benefits in excess of 4%. Risk reduction leads non- financial benefits In order to satisfy a number of business drivers for SRM, the activity will not translate immediately into financial benefits. In fact, four of the top five business drivers for SRM do not easily lend themselves to being measured in financial terms. It is therefore vital to be able to achieve, measure and report non-financial benefits. This year’s research reveals that almost 41% of companies report reduced supply chain risk as a direct result of their SRM programme, making it the most significant non-financial benefit. In financial services, a sector particularly sensitive to risk, more than 60% have seen non-financial benefits in risk management. Another very relevant benefit reported by financial
Risk has been reduced
41% Service level improvements have been made 33% Account management has improved 25% General increase in commitment (‘going the extra mile’) 24% Regulatory compliance is better assured 23% Internal or end customer experience was improved 22% More pro-active ideas for continuous improvement received 15% Quality improvements were made 14% Preferential pricing has been received 13% More supplier innovation received 12% SRM suppliers are more willing to accept and manage risk 9% Speed to market or project implementation was improved 8% You have been able to secure the best supplier resource 7% It has helped achieve sustainability goals 5% Priority access to scarce materials and/ or manufacturing capacity 4%
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STATE OF FLUX
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