Supplier Management – download our new paper now

You may remember our recent webinar, “Putting the Supplier at the Heart of Procurement Thinking” featuring me, Jason Busch from Spend Matters US and Richard Waugh of Zycus.

If you missed it and would like to listen to our words of deep and profound wisdom, you can do so via this link.

And if you were one of the 300 people who registered for the event, you should now have received the accompanying paper. We’ve now made that available generally, and you can download it (free on registration) here.  

In the paper, we argue that supplier management is taking centre stage in progressive organisations for good reason, and that maybe the category management star is fading – a little at least. Here’s a taster to whet your appetite – but do read the whole paper.

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“Ask a few questions in a typical business. How quickly can they access key information about their suppliers? How many contracts does the supplier hold across their organisation, and what is their value? What are the goals and objectives of the key suppliers? How are they performing against the requirements that the buyer sets them? Even for the most important and largest suppliers, it is surprisingly unusual to find a procurement leader who can answer these questions convincingly. (If you can.. . well done!)

So why might things be changing now?  One factor is the increased sophistication of buyers as they switch from a focus on price to a focus on total value. That requires better understanding of the supplier, and of what they can do for the buying organisation to deliver that value. Clearly, that can be much more than simply a lower price.

More supplier focus may also be a positive sign that procurement is becoming better aligned to the business needs of internal stakeholders. Given that the business and the leaders within it tend to think about their key suppliers (after all, these suppliers are agents who can affect their own personal success), rather than the more nebulous “categories”, then procurement can demonstrate alignment through a similar focus.  Greater awareness of supplier and supply chain risk is another factor which has driven this emphasis  – more on this topic  later.

So suppliers are moving centre stage, no longer seen as purely there to “keep  the business running”. There has been a period where cost reduction was without a doubt the main driver for many organisations. But now, leading companies are looking at how to obtain true value from suppliers and supply markets. For many, this means suppliers are expected to contribute to growing business value and competitive advantage. That may come from supplier innovation, cost leadership, or time to market benefits  – and therefore procurement has to reflect those priorities.

This doesn’t mean category management is dead – there will always be a need to look at spend areas in their entirety. But it is suppliers – not “categories” – that deliver real strategic benefits. To achieve those benefits, procurement needs to have a stronger focus on understanding, selecting and managing the supplier”.

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