I’m going to be better at SRM in 2018 and here are the five areas I’m going to concentrate on to do that.
1. I will segment my supplier base properly
Understanding the sorts of approach to take with my suppliers is a challenge - I need to get them segmented properly so I’m applying the right amount of limited resource to the suppliers I have. The challenge is that this can be dynamic, particularly in the boundaries between different types of suppliers. As an example, I have a supplier who can, if well managed and motivated, help with a key part of delivering my businesses overall strategy. However, If I don’t push and cajole, they will still be important, but not requiring anything like the amount of effort as a strategic supplier. I need to make sure they are in the right place. Equally, I don’t want to be spending time working with a supplier who really isn’t significant at all. As a consequence, I’m going to keep challenging the categorisation of my suppliers to make sure the approach I’m taking is optimal both for the output I get and for the effort I have available to put in.
2. I’ll be hard on strategic suppliers
For all the effort they take to manage properly, I need to make sure that my strategic
suppliers are actually delivering the strategic value which I need. In short, I will
look closely at which areas the supplier is working with us to deliver strategic
value and make sure there is a well-structured and resourced program in place to
deliver that value. I will also recognise that this may be an issue with our side
being able to work at a pace that allows that strategic value to be delivered. If
this is the case, I will work closely with my stakeholders to make sure the opportunity
and need for commitment is clear. If none of that works out, I will return the suppliers
into the ‘performance’ category and work with them in a less intensive way.
3. I’ll measure something that matters
I have lots of KPI’s with suppliers and I really need to make sure that all the
effort put into capturing the measures is worthwhile. I will start by testing if
I am measuring the right thing with a supplier and look to see if I can measure less.
This might mean that I become more focussed on the outcomes rather than the inputs,
even though that could delay response to a problem happening. I do really want those
outputs to happen, so making sure they are available is important to the business.
Conversely, I’ll stop measuring things I don’t care about.
4. I’ll do something with the measurements
Lots of effort goes into measuring performance. Once the measures are available,
I’ll work on them and with them and look for improvements and benefits that can be
linked to the use of measurement - I’ve got to make sure it’s all worthwhile!
5. I’ll invest in the right relationships
Where there is a good supplier relationship, focused on the right areas, I’ll make
sure that I’m investing in it properly. I’ll be prepared, I’ll have areas to focus
on, I’ll be chasing and concluding actions, I’ll be making sure our side is doing
all it needs to, and I’ll be making sure the supplier team is delivering their stuff
too. I’ll run proper governance and I’ll make sure the deliverables are delivered.
If I focus in these 5 areas, I’ll get more results from my supplier relationships
and deliver more value for the business.
To find out more about SRM, have a look at our website at Supplier Relationship Management .
Knowledge Hub: Building the Case for SRM In Your Business
Tagged by topic: Supplier Management
by Mark Hubbard