Ingersoll Rand

Jonathan Kamanns

Leader, Supplier Relationship Management

Supplier Relationship Management

Global Process Ownership

• What is Supplier Relationship Management (SRM)?• Why do we need it - Benefits?• Supplier tiers• Key roles in governance• Scorecard• Actions log• How do we ensure continuous improvement?• Success deliverables• Maturity in SRM

SRM must be genuine!

What is SRM?

Our suppliers influence our success the same way our own employees do; we have to define success.

In alignment with our Value Proposition …it is:

• A more formal & consistent management of our global and regional supplier relationships

• A more consistent collaboration with our regional suppliers with the goal of generating mutual value

• A structure for how regional & global supplier relationships are developed & maintained

• A way to foster continuous improvement and enable mutual strategic planning & benefit

• An enabler for additional leverage opportunities net yet uncovered

• A single-point of coordination between Company and supplier

Supplier relationship management (SRM) is the discipline of strategically planning for, and managing, the post-contract interactions with our suppliers in

order to maximize the value of those relationships and ultimately define our mutually beneficial successes.

Benefits of SRM

• Improved visibility and accountability of regional & global suppliers:– Missing the mark– Driving performance

• Better access to, and visibility of, regional & global supplier expertise not currently leveraged

• Mutual relationship-driven improvements and success– Productivity– Process Improvement– Profitability

• Potential for regional & global suppliers to add resources and investment to keep costs minimal

The supplier contract is a critical foundation, but success after the contract is our responsibility.

Primary, Secondary & Tertiary Suppliers

• Fleet Leasing/Management

• Driver Risk Management

• Fuel

• Maintenance

• Vehicle Logistics

• Telematics

• Remarketing

• Up-Fitting

• Branding/Decaling

• Collision Management

• Financing

Prioritize

Supplier Tiers

Tier 1 – Top 10%

•High value strategic supplier

•Invest in growing relationship

•Quarterly Scorecard

Tier 2 – Next 20%

•Managed supplier

•Invest to growing relationship

•Bi-annual Scorecard

Tier 3 – Next 30%

•Non-Core but important

•More easily transferrable spend

•Annual Scorecard

Tier 4 – Next 40%

•Lowest impact

•No Scorecard

Suppliers are

segmented by

not only cost

but also on risk

to the

organization.

Although high $

suppliers must

be managed,

high-risk

suppliers should

be equally

managed

Key Roles in SRM & Governance

Supplier

Business Process Owner

Business Process Administrator

Supplier Relationship Manager

Sourcing

•Delivery of product or service

•Industry Benchmarking

•Reviewer of relationship

•Ownership of deliverables, expectations & KPIs/SLAs

•Subject matter expert

•Reviewer of relationship

•Administrator of deliverables/expectations & KPIs/SLAs

•Day-to-day supplier interaction

•Reviewer of relationship

•Relationship Champion

•Coordination & Escalation point

•SRM Continuous Improvement

•Contract Negotiations with initial SLAs

•Participation in Business Reviews

•Reviewer of relationship

Responsibilities of Key Roles in SRM

Potential Business Process Administrators

• Fleet

• Human Resources

• Risk Management

• Environment, Health & Safety

• Legal

• Compensation & Benefits

• Procurement/Sourcing

• ‘The Business’

Who should I include?

Scorecard Elements

• Service Level Agreements (contractual obligations)

• Key Performance Indicators (non-contractual improvements)

– Customer Satisfaction

– Innovation

– Quality

– Cost

– Speed

Example Scorecard

Example Actions Log

Continuous Improvement

Supplier Relationship Management

Review SRM Level

Relationship Strengthening

Sustain & Manage

Continuous Improvement

Reviewed twice a year

against criteria

(internal readiness)

Monthly meetings

with business

process owners &

SRM

Scorecard reviews

with suppliers

(external readiness)

ID additional

opportunities

• RIEs

• Projects

Action

Scorecards:

• Customer

Satisfaction

• Innovation

• Cost

• Quality

• Speed

SRM Success Deliverables

• Development of mutually beneficial relationships from primary through tertiary suppliers

• Regional & global supplier visibility and alignment

• Engaged internal & external partnerships in achieving both sets of business goals

• Extended influence on supplier’s supplier(s)

• Delivery of maximum value & efficiency to internal customers with speed & precision

• Performance-driven deliverables relevant to continuous improvement

• Ensures that both parties have direct access to additional POC’s

• Documented history of performance with alignment across the organization

SRM Governance

• SRM Policy

• SRM Playbook

• SRM Shared Site

– Templates

– Updates

SRM GPO Policy

SRM GPO Playbook

SRM GPO on BOS On-Demand

Supplier Meetings Template

• (5) Introductions

• (20) Company Updates & Trends– New Products, services, & technology

– Industry Updates & Trends

– Benchmarking

• (45) Review of Current Business– Scorecards

– Action Plans / Issues & Resolutions

– Volume & Spend

– Locations

– Experience

– Sub-Supplier Review

– Project Status Update

• (10) Cost Out Opportunities

• (20) Review Strategic Priorities

• (15) Next Steps, Takeaways, Action Items

• (5) Q&A

Q&A