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In this video from the London eWorld Forum in autumn 2013, David Atkinson presents an argument for organisations taking more seriously the opportunities provides by Supplier Relationship Management (SRM). In discussing the value that SRM can bring to companies, as well as the risk of value leakage through neglect in relationship management, David presents a framework for creating and implementing a successful SRM programme and how that framework provides the basis for genuinely effective supplier engagement. Finally, he lays down a challenge to leaders to take SRM more seriously and to solution providers to help liberate the procurement profession from the shackles of price-focused cost reduction. There is a 4000-word White Paper written for conference delegates. If you would like a copy, then simply contact us via email and we’ll get it to you right away.
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Are your post-contract value aspirations high enough? Stretching the goals of your supplier management programme
David Atkinson Founder & MD Four Pillars
In association with
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The origins and emergence of SRM as a discrete discipline within procurement
Supplier Relationship Management can be traced back to the supply chain management, network sourcing, and lean approaches.
Pioneers in the automotive sector, focusing initially on supply reliability, began to intensify efforts to reduce cost and improve value....beyond the point where the contract had been signed. Supplier Development was born.
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“….competitive advantage is increasingly a function of supply chain efficiency and effectiveness…the greater the collaboration…the greater the likelihood that an advantage can be gained” (Hines)
Other sectors followed as skilled practitioners spread the message
Image courtesy of Airbus S.A.S.
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Financial Services, the Public Sector, Pharmaceuticals, Manufacturing, and many others now have their programmes
SRM has become an almost mainstream capability for procurement leaders
....there’s an overwhelming interest in doing SRM but an uncertainty about what that means in practice....
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SRM: a definition
....the deliberate pursuit and
systematic management of post-contract value attainable from an
organisation’s supplier relationships.
SRM is....
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Locog missed G4S's
corner-cutting says
insider
7
Silent calls: TalkTalk fined £750,000 by Ofcom
Tesco hit by horse meat scandal
Boeing’s Dreamliner batteries “inherently unsafe”—and yours
may be too
High Court judge slammed Mid Essex NHS Trust's attempt to deduct more than £84,550 from its caterers Medirest for a one-day old mousse, and £46,320 for out-of-date ketchup sachets as "patently absurd”
Critics blast Edinburgh trams
scheme as figures reveal project
cost could top £1bn
25% of Retailers May Go Bankrupt
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The upside: value from SRM
“additional 23% value available from concentrating on supplier relationships.” (‘Strategic Supplier
Relationship Management’ – Day, Webb & Hughes, SCM Review (2006)
“SRM leaders achieved savings of 3 percent on their total annual spend from supplier relationship management activities, whereas all respondents achieved 1 percent.” (Accenture global SRM survey 2006)
“Average financial savings attributable to SRM activity (as a % of annual spend with key suppliers)....the most popular answer was in the 2-6% bracket.”
(State of Flux SRM report, 2010)
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Harvesting SRM value: making it happen
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First Strategy then Engagement Su
pp
ly B
ase
Se
gme
nta
tio
n
Ste
p 1
:
Stak
eh
old
er
Enga
gem
en
t
Ste
p 2
:
Cro
ss-f
un
ctio
nal
SR
M T
eam
Ste
p 3
:
Re
lati
on
ship
A
nal
ysis
Ste
p 4
:
Re
lati
on
ship
St
rate
gy
SRM Wave Plan
Senior Executive Sponsorship
Technology: Process, Tools & Templates
Aspirational Targets & Benefits Tracking
Supplier Engagement
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Supplier Engagement
Engagement 1 Value Protection
(CM/SPM)
Engagement 2 Value
Development
Engagement 3 Value
Transformation
Value Optimised
Performance reviews & dashboards
Data sharing via supplier portals
Contract & risk management Real-time aggregate value tracking?
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The critical challenges
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How to liberate procurement by developing a near-standard measurement system, able to aggregate value on a real-time / point of consumption basis.
Reduce Costs
Reduce Supply Chain Risks
Grow Revenue
Technology
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To overcome the notion that contract
management or SPM is SRM
Leadership
To raise the organisation’s aspiration level by setting specific goals for SRM
To invest seriously in technology and skills to protect, develop and create value
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In closing.... SRM is no fad – and is critical to business and the development of the procurement profession
It is a proven concept – mainstream in several
important sectors – learn from others
Technology is important and can be even more so in the future....but don’t wait for it to create your value
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Contact:
David Atkinson
[email protected] Office: +44 (0) 121 373 1797
Anytime: +44 (0) 7946 562927
davidatkinson4pillars
FourPillars4PC
Visit the Due North stand to register for the SRM white paper
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