2024 GLOBAL SRM RESEARCH REPORT
PEOPLE
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66
For the 16 years we have undertaken this research, people has usually been the worst performing pillar and it is no different this year. An opportunity exists for organisations to gain a competitive advantage by investing in their people to unlock additional value from supplier relationships. As an industry we have been missing the fundamentals; from the research we know that it is crucial that supplier management roles are defined, and those employed in the role have the skills and competencies required to succeed. This should be achieved through focused training, informed by a comprehensive understanding of any current and future skills gaps. The gap is that we are still only doing this for those roles in Procurement. In reality to effectively manage a supplier relationship we need an organisation-wide approach where internal stakeholders are also aligned, their roles are defined and they are correctly trained. Even if it is only 5% of a stakeholder’s role, to ensure it gets prioritised, it needs to be in their job description, their boss needs to recognise it, it must be part of their renumeration structure and they should be trained in both functional and behavioural supplier management skills. As we have said in previous years, People is the pillar upon which all the others truly depend. Businesses seeking to build a strong supplier management programme need to ensure the right people are assigned to manage strategic supplier relationships and that they embrace the concept of ‘Return on Relationships’. Where competency gaps exist, adequate training opportunities should be provided to address them. We still see many companies either don’t have people in place to effectively deliver their supplier management framework, or where supplier management responsibilities have been defined, focus is directed predominantly towards traditional sourcing/category management duties. The majority of organisations resource supplier management activities on a part-time basis combined with other responsibilities, further illustrating the need for strong foundations within governance, value and engagement pillars. Too often we see training only focused in Procurement rather than organisation-wide. Leaders do define core roles, but even they are not expanding this into the wider business. We have identified 5 audiences that require training or education: 1) Supplier management core team 2) Procurement 3) Operational stakeholders 4) Executive stakeholders 5) Suppliers With companies increasingly demanding that their supplier relationships yield benefits beyond traditional financial measures, businesses need to adopt a structured approach to people development. To achieve this, we recommend that organisations focus on those skills that are most relevant to the role, and that require the most improvement. This often isn’t the case, with many companies rushing in to deploy a training programme, without first establishing which skills require the most attention, resulting in wasted time, effort, and cost. In order to avoid this, organisations should define supplier management roles, determine competencies needed, audit current skill levels against these, and focus training on the gaps.
The key opportunities in People are: • Invest in dedicated, full-time supplier management resources.
• Ensure the key responsibilities of supplier management roles have been clearly defined, and associated job descriptions and reward mechanisms have been created/updated to reflect this. • Increase the provision of supplier management-specific training, underpinned by a skills and competency assessment. • Train team members in how to identify non-traditional sources of value.
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