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Supplier Lifecycle Management: Reduce risk, Improve Performance and drive Supplier Value
In this research paper, Peter Smith looks at the concept of Supplier Lifecycle Management, which works from the premise that the supplier should be considered as central to procurement activities and processes.
Whilst that may seem almost obvious, it is surprising how few organisations really think like that when you come to look at it. Yet the performance of a supplier has a huge impact on an organisation’s success and will ultimately determine how the procurement function and its leadership will be regarded by the business. A supplier who provides an excellent product and service can provide real value – regardless of the quality of the sourcing process or contract, but a brilliant category management process and best practice contract will amount to nothing if the supplier simply fails to perform.
That’s why choosing the best supplier and then managing them in a joined-up, integrated and consistent manner throughout their life as a supplier should be at the very heart of everything procurement professionals do and care about.
This seems sensible, although we often see a paradox; Procurement executives complain that their own organisations do not fully appreciate the importance of suppliers and their contribution to business success, yet it is clear that those same executives do not reflect this importance in the way they and their procurement functions think, organise and work.
This paper describes the concept, explains how it differs from supplier relationship management and other common approaches, and outlines some of the key benefits available to those who take this approach.