2023 GLOBAL SRM RESEARCH REPORT
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question about the extent to which suppliers are currently regarded, and operating as such, reveals a challenge in making that a reality. Less than half of respondents report that their critical and strategic suppliers are considered part of an extended enterprise. What about the benefits? Closing the gap between the aspiration of the 97% who believe that suppliers should be part of the extended enterprise and the reality of the less than 50% who are making it happen should be helped by a clear understanding of the benefits that can be achieved by that closer and more integrated working relationship. Organisations are aware of a broad range of benefits that can be gained from managing suppliers as part of the extended enterprise more effectively. These range from risk reduction and supply chain efficiency to more value- based benefits such as access to specialised supplier expertise. Collectively, all of these benefits will contribute to an improved end customer experience, but they are currently not sufficiently recognised. What benefits do organisations see as a result of managing the extended enterprise? 79% Improved risk mitigation 71% Improved supply chain efficiency 70% Increased flexibility/agility 68% Being valued as a customer of choice 65% Increased supply chain resilience 63% Access to specialised expertise 59% Increased supplier loyalty 54% Improved quality control
What information do you share with your critical & strategic suppliers?
an extended enterprise, information sharing is key – imagine the reaction if you refuse to share demand and forecasting data with your own in-house manufacturing division. Should suppliers be regarded as part of an extended enterprise? Over the years we have been conducting supplier management research, we have recorded the increasing shift towards identifying critical and strategic supplier relationships via segmentation, developing treatment strategies to optimise those relationships, and developing closer, more collaborative ways of working. Perhaps without using the precise term, companies have increasingly acknowledged that suppliers are, or at least should be, part of their extended enterprise. The answer to the direct question ‘Should suppliers be considered part of your extended enterprise?’ was an overwhelming ‘yes’ (98%). However, the follow-up Guidance on improvement and innovation 67% 51% 32% Your product / service / technology roadmaps 67% 38% 28% General company news 63% 54% 36% Your current or future challenges 59% 62% 42% Your end customer needs and expectations 56% 50% 38% Your business development plans 52% 45% 27%
Leader
Fast Follower
Follower
Your company strategy
83%
78%
54% Supplier performance data
80%
69%
Information sharing To work effectively as part of an extended enterprise it’s crucial that suppliers understand the companies with whom they are working. This needs to go beyond a product or service specification and extend into strategic objectives, values and culture. From the feedback we have received, it’s clear that suppliers are hungry for information, and the leading supplier management companies are satisfying this need most effectively. Leaders are far more likely to share product, service, technology roadmaps, and relationship strategies. This contrasts sharply with Fast Followers and Followers, where it’s far less prevalent. Sharing this type of information requires a level of openness and transparency that has not always been a feature of even highly integrated and ‘so called’ strategic relationships. For suppliers to be an effective part of 48% Your sustainability goals/strategy 80% 68% 54% The strategy for your relationship with them 76% 49% 30% Future demand and forecast data 74% 65% 55% Company news that affects them 70% 55% 39% Your organisation chart including roles & responsibilities for the relationship 67% 55% 34%
Walking the Line Recognising suppliers’ integral role within your organisation is the first step in transitioning from traditional procurement to effective supplier management. Let us help you enhance and transform your Supplier Relationships..
Next step, talk to us. https://www.stateofflux.co.uk/2023srmreport/ extended-enterprise
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