COLLABORATION SUMMARY OF INSIGHTS
2023 GLOBAL SRM RESEARCH REPORT
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Customer of Choice Feedback received during and immediately after the COVID-19 pandemic revealed that many organisations who believed they were a customer of choice found out they were mistaken. Their experience was that they were not prioritised when products and services became scarce due to supply chain disruption. They weren’t automatically receiving the information needed to plan and maintain business continuity. For many who had been sceptical about the concept of ‘customer of choice’; this was a wake-up call and a tough and expensive lesson to learn. Despite our previous discussions in these reports about the advantages of being a customer of choice, it was only when things went badly wrong that the realisation dawned on many companies. However, it takes time and effort to establish a customer of choice status and even longer to create and execute sourcing strategies that make it easier to achieve. When we asked organisations to self-assess their status as a customer of choice for their key suppliers in 2022, it emerged that just over half believed they held this status for more than 50% of their critical and strategic suppliers. In 2023, this figure remains roughly the same at 51%. This is where the more developed supplier management programmes of Leaders are reaping rewards. According to this year’s responses, an encouraging 93% of the Leaders are confident that they are a customer of choice for more than half of their key suppliers, compared to Fast Followers at 68% and Followers at 35%.
and team collaboration to achieve tasks is to be applauded, it only has a wider impact when the organisations in question collaborate to achieve shared, or at least complimentary, goals and objectives. These can be discussed, aligned and included in what is often called a joint business plan. For many organisations, however, collaboration has not yet developed to the point where these have been established. Our question focused on critical and strategic suppliers as it is these relationships where investing time and effort in joint business planning is likely to show the best return. Unsurprisingly, as joint business planning represents a relatively mature approach to supplier management, few Followers have joint business plans in place, with just 20% reporting any activity. However, the picture is more encouraging. Leaders at 91% are more than twice as likely to have joint business plans with more than 50% of their critical and strategic suppliers, compared to Fast Followers at 31%. Proportion of critical & strategic suppliers where joint business plans have been created? Leader Fast Follower Follower Less than 50% 21% 33% 8% 50% to 75% 41% 19% 12% 75% to 100% 28% 12% 0% No plans 10% 36% 81%
of Leaders and 75% of Fast Followers report improved trust in more collaborative relationships. 72%
of respondents report collaboration on sustainability goals and objectives. 19%
of Leaders are using 360˚ relationship assessments. 92%
What are the most significant results of collaboration with critical & strategic suppliers? Leader Fast Follower Follower Suppliers are more engaged on innovation and continuous improvement 74% 59% 44% There is more trust in the relationship 72% 75% 62% Established a better understanding of mutuality (more win-win outcomes) 35% Established a number of shared goals and objectives 43% 35% 29% Fewer disputes and escalations 35% 31% 29% Internal executive stakeholders are more engaged 33% 34% 27% More collaboration on compliance with SLAs/KPIs etc 35% 31% 27% Supplier executives are more engaged 39% 26% 28% Working together to reduce supply chain risk 31% 25% 28% Joint plans in place to create value 44% 44% 20% Engage in more joint planning 17% 25% 21% Better engaged on sustainability 17% 22% 19% Supply chain is more resilient 17% 18% 17% Joint Business Plans Collaboration is a broad term for what happens when individuals, teams or wider organisations try to work together. While individual 26% 26%
Collaboration is examined through the lens of Leaders, Fast Followers and Followers. As it is in this area, almost more than any other, we see a difference in both practice and results. Collaboration is also a fundamental attribute of a successful and integrated supply chain that is part of an extended enterprise. Collaboration is the pillar where Leaders and Fast Followers demonstrate the most mature approach and receive the most benefits. Trust is The relationship attribute that benefits most from collaboration, where improvement is reported by 72% and 75% of Leaders and Fast Followers, respectively. A ‘first look at innovation’ features higher this year, where 74% of Leaders benefit. Respondents report that better collaboration leads to more win–win outcomes when working with suppliers. One of the least quoted benefits, at only 19% overall, is alignment and engagement to help achieve sustainability goals and objectives. Joint business planning represents a relatively mature approach to supplier management. Leaders are twice as likely to have joint business plans as Fast Followers. The COVID-19 pandemic was a wake- up call for many sceptical about the concept of ‘customer of choice’. This
appears to have spurred on Leaders, of whom 93% are confident that they are a customer of choice for more than half of their critical and strategic suppliers. 360˚relationship assessment is the technique most frequently used by Leaders (92%) to assess the strength of relationships with critical and strategic suppliers, albeit with scope to expand to more suppliers. Benefits of Collaboration Collaboration is unique amongst the Six Pillars of SRM, wherein it combines both inputs and outputs. There is no doubt that good practice in the other five pillars will make collaboration easier to achieve. It also has a number of activities that should be regarded as key enablers in their own right. These include joint business planning, specific
is reported as being improved by over 66% of respondents, with 72% and 75% Leaders and Fast Followers, respectively, seeing it as a benefit. Seeing a ‘first look at innovation’ featuring higher this year is encouraging. Leaders excel, with 74% reporting it as an outcome of collaboration efforts. The next most frequently reported benefit is an increase in win–win outcomes when working with suppliers. This does not imply that every supplier interaction must be characterised in this way. Still, if any relationship, particularly a critical or strategic one, is to thrive, it must be based on a principle of mutuality in terms of risk and reward. When looking at all respondents, 38% said they established a better understanding of mutuality. For Leaders and Fast Followers, the figure is close to
“Collaboration is the pillar where Leaders and Fast Followers demonstrate the most mature approach and receive the most benefits.”
joint improvement and innovation initiatives, and exchanging feedback. This year, as in previous, we find that Leaders and Fast Followers are demonstrating the most mature approach and are receiving the most benefits. This year’s research identifies a broad range of examples of collaboration and its benefits. Slightly more than two in three respondents reported building more trust in the relationship after collaborating more closely with their suppliers. Overall, this
44%, an improvement, but more work needs to be done on this vital element of relationship building. Other benefits that scored highly included supplier executives being more engaged, reducing the number of disputes and escalations, and a better alignment on shared goals and objectives. One of the least quoted benefits at only 19% overall is better alignment and engagement to help achieve sustainability goals and objectives.
“Feedback received during and immediately after the COVID-19 pandemic revealed that many organisations who believed they were a customer of choice found out they were mistaken.”
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