SRM

Through our client engagements and our research we observe organisations continue to revolve around the tender and, even in cases where category planning is evident, there is less supplier management on the backend of the cycle to truly capture the value. The wheels tend to wobble on implementation and buckle when it comes to management. The inevitable impact is contract leakage and a deficit in expected benefits.

Organizations have surely dabbled with SRM. They are very much exploring how to do it and how it might work for them. PwC support this contention in a recent survey, pointing to the fact that 23% of respondents had no SRM in place, while 64% are exploring. Only a very small percentage had established SRM in place. Many have taken the rudimentary steps to tier or segment out their supply base to determine where the focus should be, in terms of critical or strategic suppliers. Many encounter difficulties in initiating, developing and managing SRM.

Our experience of SRM is a continued quest by buyers to deliver more by way of savings, but the opportunity lies not just in savings but in broader value delivery achievable through the relationship. Where can this illusory value be found? Suppliers bring obvious capability and expertise. This needs to be tapped in to, not just to deliver, but to innovate and bring more value while reducing supply risk exposure. Other drivers, both regulatory and competitive differentiators, include sustainability, lean-agility, and resilience.