2024 GLOBAL SRM RESEARCH REPORT
RESEARCH ROUND-UP
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Research Round-up
Elevating Supplier Management practices: the road ahead Over the past 12 months, the global economic environment has been characterised by persistent inflation, higher interest rates, fluctuating energy prices and ongoing geopolitical tensions. While supply chain issues have eased, slowing growth in major economies is continuing to affect many sectors. Amid this environment, good supplier management is critical. Strong supplier relationships enhance cost control, provide supply chain stability, and improve risk management, while also enabling innovation and faster adoption of cutting-edge technologies. Supplier management is a tool that can provide competitive edge in uncertain times. Like any relationship, concerted effort and investment is required. The path to excellence in supplier management is not without its challenges, as our research shows, some companies are thriving, while others are struggling to maximise the potential of their
supplier management systems. A substantial portion of Leaders are “happy” or even “very happy” with their processes, finding that their systems are functioning efficiently and helping them derive significant value from supplier relationships. However, the picture is and dissatisfaction, with some indicating that their supplier management practices are failing to meet expectations. These organisations often struggle to maintain the resources or support needed to build strong supplier networks. The general sense of dissatisfaction among this group highlights a need for improvement in both the tools and approaches being used. very different for Followers. Many express frustration Overcoming challenges in Supplier Management While satisfaction varies, the challenges companies face in supplier management are often universal. Competing business priorities remains the single most significant obstacle, with supplier management often sidelined as other more urgent matters take precedence. This issue is compounded by a lack of sufficient resources and budget, making it difficult for many companies to establish mutually beneficial relationships with their suppliers. Another persistent challenge is the inability to effectively measure and quantify the benefits of supplier
management. Without clear metrics and data, many companies find it difficult to demonstrate the financial and operational value these relationships bring. This, combined with organisational changes and limited visibility into supply chains, adds further complexity to an already challenging task. For many, the usability of supplier management systems continues to be a sticking point. Organisations report frustration with outdated or inefficient systems that hinder their ability to track performance and streamline processes. In today’s tech-driven world, poor functionality and a lack of integration can severely limit an organisation’s ability to realise the full potential of its supplier management programme. Unlocking financial benefits through supplier relationships Despite the challenges, some organisations are succeeding in turning supplier management into a powerful driver of financial performance. Those at the forefront of this transformation are seeing strong returns on their investment, with half of Leaders achieving annual financial benefits exceeding 6%. These organisations are able to capitalise on their supplier relationships to not only drive cost savings, but also enhance innovation and performance across their supply chains. However, not all organisations are realising these kinds of returns. Many find themselves achieving
only modest financial gains, with some struggling to push beyond minimal annual benefits. These disparities in financial outcomes underscore the importance of refining supplier management practices and investing in the right tools and systems that enable companies to maximise the value of their supplier partnerships. Pathways to improvement: navigating the future To move from dissatisfaction and underperformance towards greater success, organisations must focus on addressing the most significant barriers holding back their supplier management practices. For those battling competing business priorities, it is crucial to create a dedicated focus on supplier management, ensuring that it is treated as a strategic function rather than a secondary concern.
Aligning supplier management with broader business goals and securing the necessary resources and support from top management will also be key in driving progress. Visibility and transparency in the supply chain are essential to building stronger, more effective supplier relationships. This will help organisations better manage risk, identify opportunities, and establish more robust, data-driven relationships with their suppliers. Finally, addressing the shortage of skills and competencies in supplier management will be pivotal to achieving success. Developing the right capabilities, including the ability to manage complex supplier ecosystems and navigate regulatory requirements, will help organisations drive improvements in performance and unlock the full
range of benefits that strategic supplier management can offer. A new era of Supplier Management The future of supplier management is bright for those willing to make the necessary investment and support a strategic shift. By addressing the core issues of resource allocation, system functionality, and data visibility, organisations can transform their supplier management programmes into key drivers of financial and operational success. As more companies begin to see the value in strategic supplier relationships, the gap between Leaders and Followers will start to close, bringing the benefits of robust supplier management to businesses of all sizes and from all sectors.
supplier relationships. Divergent satisfaction: Leaders vs Followers
When it comes to overall satisfaction with supplier management practices, the gap between high-performing Leaders and other organisations is striking. Leaders generally report higher levels of satisfaction, with many expressing confidence in their
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