Extended Enterprise 36 2023 GLOBAL SRM RESEARCH REPORT
EXTENDED ENTERPRISE
37
Positioning suppliers as part of an extended enterprise is not new, but it hasn’t proved easy to achieve. It has never been far from the supplier management concept of closer, more strategic relationships with critical suppliers, but to work, it must, in some ways, go beyond that. It requires high confidence in the supplier to operate with minimum oversight and sometimes to represent you and your brand in the market. Recent examples in the ‘franchised’ industries have revealed how a breakdown in communication, shared values and trust can devastate brand and reputation. There is huge potential in creating an extended enterprise with a genuinely integrated supply chain that brings all suppliers and customers closer as part of an eco-system. This more cohesive and collaborative entity can exert more collective focus on delighting the end customers and achieving other mutual goals and objectives such as, environmental sustainability, diversity and inclusion, and a social agenda. This is not a new concept or a huge leap from leading supplier management practices. It requires belief in the power of the extended enterprise underpinned by good processes and technology. To be successful, companies along the supply chain will need to develop an intimate knowledge of each other, break down barriers, change behaviours and build trust. The key activities to move to a more extended enterprise are: • Map the supply chain to determine which suppliers contribute most to the end customer experience and other objectives. • Use the anticipated benefits from closer integration of the supply chain as an extended enterprise to support the business case for more investment in supplier management. • Break down barriers by sharing more information, changing behaviours and building trust. “To be successful, companies along the supply chain will need to develop an intimate knowledge of each other, break down barriers, change behaviours and build trust.”
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