COLLABORATION
Summary
Around half of the survey respondents have found improved collaboration through SRM yields both direct financial benefits and indirect or non-financial benefits. Collaboration boosts other aspects of relationships: more than half of companies report that trust — a key component of successful relationships — has improved. Collaboration is also supporting performance: 44% of organisations say it helps them work more effectively on continuous improvement. But we have found serious shortcoming’s in the extent to which organisations develop collaboration. Only one in five (17%) have developed joint business plans with more than half of their critical or strategic suppliers. Joint business plans are the pinnacle of collaboration and have been proven to help both buyers and suppliers release value. Yet, there are signs of optimism: 90% of leading companies report increased levels of collaboration.
O ne way to do procurement is to put suppliers the other side of a fence. The objective is to get what the organisation wants from them at the lowest price. But over the last 20 years, this approach has seen diminishing returns. Driving down suppliers’ margins discourages them from proposing new ideas and ways of working from which buyers could benefit. Collaboration, therefore, is one of the goals of SRM, and the one which, if achieved in the right way, can create the most value from a relationship. But collaboration it is not universally achieved by our survey respondents. Just over half of organisations are finding that improved collaboration achieved via their SRM programmes is yielding both direct financial benefits and indirect or non-financial benefits. Almost half are optimistic but say it’s too early to be sure about the value they have gained and a small proportion (7%) say they have seen no impact of SRM on collaboration. All industry sectors report that they are collaborating more effectively with internal stakeholders and their key
suppliers as a direct result of their SRM programmes. IT and telecoms and financial services lead the way with almost 60% of companies reporting that they have improved collaboration in these sectors. It is a different story for SRM leaders. They are registering the most significant levels of new and exciting collaboration with their key suppliers. Over 90% of leading companies report increased levels of collaboration. Fast followers are not far behind on 85%. Even followers are reporting improved collaboration: around 40% notice some improvement through SRM. This goes to show that even with a programme in its early stages, engagement with suppliers via SRM will start to have a positive impact on collaboration.
17% OF ORGANISATIONS HAVE JOINT BUSINESS PLANS IN PLACE WITH MORE THAN 50%OF THEIR CRITICAL OR STRATEGIC SUPPLIERS 44% OFCOMPANIESWORKMORE EFFECTIVELYONCON- TINUOUS IMPROVEMENT THROUGHCOLLABORATION 90% OF LEADING COMPANIES REPORT INCREASED LEVELS OF COLLABORATION
What type of collaboration is taking place?
The scope to collaborate with suppliers is huge, as is clearly indicated by the number of different areas of work reported by survey respondents. More than half of companies report that trust — a key component of successful
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STATE OF FLUX
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