2024 GLOBAL SRM RESEARCH REPORT
GOVERNANCE
60
61
Defined treatment strategies, paired with a thorough supplier segmentation process, are the most effective way for organisations to bring structure, optimise resource allocation and manage their supplier portfolio. The application of these treatment strategies should act as an enabler to achieve the following outcomes from their supplier management programme: 1. A high standard of supplier management Well-designed treatment strategies will inform organisations on what level of resource and focus should be allocated to each supplier activity and the effort needed to proportionately manage the supplier portfolio. The assigned level of governance determines the appropriate level of performance, contract and risk management to take place with any given supplier. Further, in the case of critical or strategic suppliers, set the stage for joint business planning and relationship development to create new value. Setting this structure assigns ownership and accountability to ensure all stakeholders involved understand the role they play in delivering supplier management. Along with ownership and accountability, structure also means that supplier management becomes standardised and repeatable. 2. Ability to scale and embed supplier management processes Supplier management professionals should ensure that the treatment strategies developed align to the strategic goals and direction of the organisation. Running a segmentation exercise and piloting wider roll out with key strategic suppliers can demonstrate the benefits supplier management can deliver to the organisation and create a case for change that will enable further progress. Having repeatable processes and activities in place, based on an organisation-wide segmentation model, can facilitate easier scaling of activities across the organisation. 3. Become a customer of choice Effective management of contracts, performance, and risk, when done collaboratively with suppliers, fosters trust and strengthens relationships. This trust lays the groundwork for becoming a customer of choice, enabling your organisation to work more strategically with critical and strategic suppliers. By prioritising the establishment of this foundation, you can enhance collaboration, drive innovation, and achieve a stronger return on relationships, positioning your business as a preferred partner in the eyes of your most important suppliers. The key opportunities to deliver effective governance practices are: • Align organisation-wide segmentation to what is strategically important to the business and ensure that this is reflected in the treatment strategies applied. • Ensure a consistent and repeatable approach to supplier governance, communicated through a supplier management handbook which is linked to defined treatment strategies from the segmentation exercise. • Ensure that contract, risk, performance and relationship management are founded on robust, proportionate and auditable governance across all supplier tiers. “Ensuring that your supplier management activities are built upon an organisation- wide segmentation model provides a strong foundation for realising value and a return on relationships.”
Powered by FlippingBook