2023 GLOBAL SRM RESEARCH REPORT
8 ACTIONS FOR THE YEAR AHEAD
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8 actions for the year ahead
This call to action draws on the opportunity areas identified in each of the pillars and some of the wider topics discussed in this report. It combines the need to learn the lessons of the past few years and recognise supplier management’s changing scope to achieve positive and lasting change.
and resources, organisation change and insufficient technology support. It isn’t easy to pinpoint the exact cause of this trend. Still, a likely reason is the extent to which supplier management has been exposed in light of the events mentioned in the introduction to this summary. Financial gains at record level Despite the rather gloomy assessment of progress, financial gains as a result of supplier management are reported at record levels following a dip in the last couple of years. However, this should not hide that companies are still struggling to track and report the broader aspects of supplier management value. Risk continues to dominate. The trend that has seen the need for improved risk management and supply chain resilience continues as they remain among the most important business drivers for supplier management. Engagement is strong As in 2022, engagement with stakeholders remains the strongest performing pillar overall, with good levels of support reported from the
three main stakeholder groups: senior stakeholders, operational stakeholders and critical and strategic suppliers. In particular, the level of engagement achieved with senior stakeholders during the crisis management phase of COVID-19 has been maintained. Good governance is undervalued Supplier segmentation is now accepted practice in almost all companies, although too often, the criteria used are limited and lack alignment with business drivers. As a result, some suppliers that are important to the organisation’s success are not managed to the best effect. As mentioned in ‘Increased scope’ above, this can include suppliers that impact on sustainability goals and objectives and also supplier diversity targets. Too few companies are developing differentiated treatment strategies that bring segmentation to life and optimise supplier management for all suppliers. People are key Developing skills and competencies remains one of the weakest features of supplier management practice in 2023. We see the development of skills and competencies being
approached in an ad-hoc fashion instead of a structured process. Technology Supplier management remains heavily dependent on fragmented systems and desktop tools. While there has been some increased investment in supplier management technology, it is slow and failing to keep pace with other business processes. Again, as referenced in ‘Increased scope’ above, the newer aspects of supplier management, such as sustainability, supplier diversity and supply chain risk, are under- represented in technology solutions being used. Third-party data sources are under-utilised, and automation and AI are yet to feature in any meaningful way. Collaboration yields benefits Collaboration is where Leaders and Fast Followers are reaping the rewards of a more mature approach. Relationships are benefitting from more trust and a collaborative approach to innovation. Newer considerations in supplier management, such as sustainability, are not yet benefitting from a collaborative approach.
1: The extended enterprise. Certain business-wide goals and strategies simply cannot be achieved and delivered without suppliers. It’s important that company leaders recognise this. Where key services are delivered straight to your customers by your suppliers it is essential that their behaviours, actions, and practices mirror that of your brand. To achieve this, you will need to develop a strategy to integrate and treat those suppliers as part of your extended enterprise. 2: Increased scope. Re-examine the scope of your supplier management activities to ensure that management and oversight of emerging elements such as sustainability and supplier diversity are effectively managed. 3: Value. Be more creative in finding ways to capture and report value using technology to track both direct and indirect financial benefits. 4: Engagement. Ensure that all suppliers, particularly critical and strategic, are engaged
in a structured process to gather feedback on how you are perceived as a customer, as this serves to increase engagement and provide guidance on improvement. 5: Governance. Realign segmentation criteria and weighting to reflect the post-Covid view of supply chain vulnerabilities and the increased scope of supplier management. 6: People. Place more emphasis on creating a more process-driven and structured approach to people development and increase investment in training. 7: Technology. Align technology investment to the long-term vision for supplier management, transition away from desktop tools, and drive adoption through effective change management. 8: Collaboration. Develop and embed more collaborative behaviours in the supply chain to enable the extended enterprise.
The key challenges that remain in the area of collaboration are: • Embedding collaborative behaviours in the supply chain to enable the extended enterprise. • Adopting a more collaborative approach to achieving sustainability goals and objectives. • Building a better understanding of shared goals and objectives to inform business plans and drive more win-win outcomes. • Create a stronger link between customer of choice benefits and tangible business outcomes. • Act on the results of 360˚relationship assessments to create healthier, more collaborative relationships
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