2024 GLOBAL SRM RESEARCH REPORT
ABOUT SUPPLIER MANAGEMENT, STATE OF FLUX AND OUR RESEARCH
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practice Supplier Management within organisations, and is designed to deliver value quickly. When starting out on a journey into Supplier Management, the key initial step is to explore fully the scale and scope of the value opportunity . This insight, ideally through an internal assessment and Voice of the Supplier research to provide both internal and external lenses, can be complemented by a spend and opportunity assessment – which can be a way to help provide the budget required for subsequent steps. This stage is crucial to give an impartial perspective on the organisation’s SRM activity compared to best practice and their industry, and pinpoint key areas for focus and investment. An important, and sometimes overlooked step, is then to create the business case for change – clearly defining and articulating why Supplier Management is crucial for the organisation and the target benefits to be delivered. Whilst important to obtain sign-off for future stages, this
is crucial to define, along with the target behaviours and levers, in order to gain buy-in, build support and harness commitment from internal and supplier stakeholders alike. Translating this business case to a clear value proposition develops a vision for the future, which can be used in communications, change management workstreams going forward and ensure alignment across stakeholders on the target end supplier management state and focus. After the business case is developed, the next stage is to set up and run the Supplier Management programme. This can be achieved in parallel, through: » Engaging in value release through supplier engagement and collaboration. This workstream, starting with pilot strategic suppliers, puts an emphasis on 360° relationship reviews, joint account planning and mutual value identification and delivery.
» Building for longevity through developing and embedding the right processes, tools and governance to underpin Supplier Management, from segmentation through to treatment strategies determining what activities need to be undertaken for which supplier and by whom. This should all be in conjunction with upskilling the wider organisation through training and updating responsibilities, as well as undertaking comprehensive change management and communications. The final stage, scaling and growing value , is to formally capture, document and share the business value that has been created. This is important to focus on, as it provides evidence of success (needed for continued buy-in from internal and external stakeholders alike), as well as enabling organisations to expand their programmes to deliver further, lasting value.
About Supplier Management, State of Flux and our research
About Supplier Management Supplier Management has at its core three fundamental elements to ensure that contracted value is achieved and maximised. These are the management of: » contracts - managing value against what was agreed contractually between both parties; » risk - securing value through exercising oversight of the risks a supplier brings; and » performance – enhancing value by enabling incremental gains through continuous improvements. Whilst all crucial, the management of these three elements should not be applied uniformly across the supply base, but instead be undertaken proportionately to the supplier’s importance, ideally determined through a robust segmentation approach. Having this differentiated approach to managing suppliers by their relative importance can enable organisations to devote the right time, effort and resources to the right relationships. This allows them to collaboratively explore new value with those suppliers that are key and strategic to them through supplier relationship management.
About State of Flux State of Flux has been at the forefront of Supplier Management since its foundation in 2004. Over the past 20 years, we have supported many organisations across geographies and industries on their supplier management journey through providing consulting, training and technology (via our proprietary platform, SupplierBase). Furthermore, through our research in Supplier Management, we have established a reputation for thought leadership. Via our locations in Europe, US and Australasia, we harness our deep subject matter insight and experience to deliver bespoke results for clients across the globe, focused on maximising value. Our approach, while tailored to the client’s goals and requirements, is routed in our ‘Six pillars of SRM’ – thought leadership developed over many years as a practice template for effective, efficient and best practice supplier management. About our research Now in its 16th year, State of Flux’s SRM research continues to be the world’s leading insight into SRM across industries and geographies. This year we include insights from 496 individuals from 334 organisations around the world and across 13 industries.
The research findings, combined with the insights from previous iterations, allow us to look at trends and practices within SRM at an unprecedented scale, spanning millions of data points. We would like to once again extend our thanks to those organisations who have provided insights; both across multiple iterations of the research allowing them to track and review progress in their SRM practices, as well as those organisations completing for the first time this year. As with previous reports, our research focusses on the six pillars of SRM – for more information on each, please see page 24 – based on a revised question set that allows both direct comparisons with previous years for trend analysis, as well as new questions to allow understanding of contemporary elements. Furthermore, as with previous reports, we have included an additional theme for investigation – Return on Relationships – a consideration that we have seen become increasingly important across the last 12 months for both current and prospective clients. Our Supplier Management Roadmap The Supplier Management Roadmap is our approach to developing and embedding best
Scale and grow the value
Supplier Management Roadmap
Achieve ROI
Deliver measurable value release
Deliver Supplier Management at Speed Set up and run
Increase supplier commitment and access customer of choice benefits Demonstrate the case for scaling and evolve to BAU Expand joint business planning across tier one suppliers Implement or improve: supplier performance management, supplier contract management, supplier innovation management (supplier incubation), supplier risk management, ESG e.g. management of diverse and inclusive suppliers Develop continuous improvement of the supplier management programme
We help our clients to...
Value Proposition Development Create the business case
ENGAGE IN VALUE RELEASE External focus - supplier engagement and collaboration
360 relationship reviews
Joint business plans and collaborative working
Quick win delivery and SM programme management
Explore the opportunity
Organisational goal specific SM value proposition development Defined and validated value objectives Business case for change Roadmap and action plan Value proposition elevator pitch Form steering committee
Six Pillars benchmark exercise Business strategy/ value alignment assessment End customer and supplier value mapping Spend data and opportunity analysis Voice of the Supplier research Value Opportunity Diagnostic
BUILD FOR LONGEVITY Internal focus - people, process, and technology
Segmentation and treatment strategies
SM policy, process, operations, and governance models
Team capabilities / responsibilities
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