2024 GLOBAL SRM RESEARCH REPORT
PEOPLE SUMMARY OF INSIGHTS
68
69
“Mature organisations who attain optimal returns from their supplier relationships have defined the supplier management role, and are focused on achieving ROI from post-contract supplier management activities.”
“The training ‘supply vs. demand’ challenge still exists with a significant deficit between the needs organisations identify and their ability to deliver.”
As with other areas of our research, this question illustrates a significant difference between Leaders and Followers. The following key activities clearly show this: • The supplier management role is defined (87% of Leaders versus 32% of Followers) • Supplier management training implemented (79% of Leaders versus 24% of Followers) • Supplier management included in personal performance measures (79% of Leaders versus 18% of Followers) There is a clear opportunity for Followers, (where 35% had not done any of the above) to start investing in the right activities to embed supplier management skills and competencies in their organisation. To develop supplier management skills and competencies, have you done any of the following? Leader Fast Follower Follower Completed supplier management skills and competency assessment 61% 23% 6% Developed supplier management skills and competency framework 79% 42% 14% Created or updated job descriptions 24% Defined the main supplier management role 87% 73% 32% Defined the supplier management roles of operational personnel that interact with suppliers in a supplier management capacity 74% 61% 22% Included supplier management in personal performance measures 79% 55% 18% Implemented supplier management training 79% 55% 24% None of these 0% 2% 35% 61% 61%
How is supplier management resourced within your organisation? Leader Fast Follower Follower Full time dedicated supplier managers responsible for more than one relationship 64% 53% 24% Full-time dedicated supplier managers responsible for one relationship 6% 5% 1% Part-time and combined with broader category management, sourcing responsibilities 25% 32% 41% Part-time and combined with broader operations, service management responsibilities 6% 10% 22% Not Used 12% Supplier Management skills and competency development 0% 0% It is imperative that organisations undertake a range of measures to continually develop supplier management skills and capabilities, in order to harness and realise the value that supplier management can deliver. Across respondents, the most commonly cited activity to have been undertaken was defining the main supplier management role, followed by the definition of other supplier management related roles. However, these were only reported by 47% and 37% of respondents respectively so there is still a lot of work to be done. Only 15% of respondents have completed a skills and competency assessment, and only 36% have implemented supplier management training. The difference is evident when we compare Leaders and Followers results below. 23% of all respondents indicate none of the above activities had been completed.
Where does responsibility for supplier management typically sit in your organisation? 59% In the procurement function (central/group)
Despite employee capability being fundamental to the delivery of high performing supplier relationships, there is still significant opportunity in developing competencies associated with supplier management. As with previous years, the People pillar emerged with the lowest level of maturity this year, and close to a quarter of participants stated they had not implemented expected best practice measures to facilitate the development of supplier management skills. Responsibility for supplier management primarily sits within the central/group procurement function, which makes it easier to implement the procurement people development measures to the central group. However, when examining the role of individuals, it seems that organisations aren’t always set up to deliver supplier management initiatives effectively. Over half (54%) of respondents stated that supplier management is still conducted on a part-time basis, alongside wider
responsibilities. For example, for many organisations segmentation is completed by category managers rather than centrally As expected, Leaders are actively addressing supplier management skills and competency development amongst their procurement workforce, but even they are not good at rolling this out to the wider business. However, this doesn’t reflect the general trend, only 36% of respondents indicated that their organisation has implemented supplier management training. Worryingly just under a quarter (23%) of respondents indicated that their employers have not adopted any best practice measures to facilitate people development. Furthermore, the skills considered most important for supplier management by all respondents, are: strategic thinking (54%), followed closely by communication (52%). Leaders however deviated from these top two; highlighting commercial and contractual expertise and cross-functional working (58% and 53%) as their top two respectively. Strategic thinking was also highlighted as one of the primary skills respondents feel requires improvement (49%); second only behind the ability to identify ‘non- traditional’ areas of value (51%).
Interestingly, identifying value was most cited by Leaders as lacking in their organisations (61% of respondents). This suggests that there is room for the concept of return on relationships to be more widely embedded in the mindset of organisations, and support is needed to help stakeholders identify and harness it.
In the procurement function (decentralised/business unit)
18%
In another function (central/group)
6%
In another function (decentralised/business unit)
17%
Accountability for supplier management activities When looking at where supplier management activities are resourced from, there is a clear split between Leaders and Followers. 70% of Leaders have fulltime dedicated supplier managers responsible for one or more relationships. Conversely, that figure drops to 25% among Followers. This sends a clear message, if you want to be good at Supplier Management you need to invest in dedicated Supplier Managers. Mature organisations who attain optimal returns from their supplier relationships have defined, supplier management specific roles. The majority (70%) of individuals who report this are, from Leader organisations. However, (54%) of respondents stated that supplier management is still a part-time role, either combined with broader category management and/or sourcing suggests that work still needs to be done to highlight the value that can be derived from a robust supplier management programme in order to drive investment in dedicated supplier management roles. Only 8% of Followers reported that their organisation does not allocate resources to supplier management activities. responsibilities, or as part of operations and/or service management activities. This
The organisational position of supplier management?
Successful supplier management programmes are organisation-wide initiatives, characterised by strong levels of engagement and input from wider business stakeholders, but led by a central procurement team. It is encouraging to see that 59% of respondents reported that supplier management responsibilities fall within this structure. Conversely, 23% of respondents stated that the responsibility for supplier management activities sits in other functions, outside of procurement, a figure predominantly driven by Followers. While this is not necessarily a blocker to strong supplier management, having supplier management activities sitting elsewhere (particularly if decentralised) can make it difficult to ensure alignment with wider procurement activities and provide a more cohesive approach to the full procurement lifecycle.
of respondents highlighted that they have received specialist supplier management training. Only 36%
of Leaders have defined the supplier management role. 87%
of respondents reported that supplier management is carried out on a part-time basis. 54%
Powered by FlippingBook