In Recession and Recovery, Putting Supplier Relationships First (Part 2)

IACCM's Tim Cummins, ever the collaborative gentleman sitting between the buy and sell side, recently penned a post that shares a bit of survey data from his organization, capturing the essence of supplier relationships in the market in the current environment. Tim notes in his post on Commitments Matter that "according to the results of a recent IACCM survey on Spend Management ... 46% [of recent survey respondents] feel that 'Overall, our trading partner relationships today are stronger, more collaborative, more innovative, and more mutually-beneficial than they were 24 months ago.'" Tim also quotes another interesting factoid from his organization's recent research, saying that they "also found that procurement organizations believe that 'they have responsibility for supplier success and that this includes the need for building relationships and credibility and contributing to trading partner collaboration and satisfaction.'"

Yet they're not putting their technology and process investments in the right place to reflect this perspective of responsibility for supplier engagement and relationship management. Accordingly, "less than 30% indicate that their organization measures trading partner satisfaction," which is a common metric for companies that leverage supplier performance management and related score-carding and supplier development tools. In our own research and interviews, we've discovered a similar trend as well: procurement organizations, in general, have prioritized focus and investment in data analysis, purchasing automation and negotiation areas rather than on measuring and managing performance and relationships.

I recently spoke to another individual with a sourcing background that I've known for a number of years and who is actively pursuing what might turn out to be an aggressive, company-wide supplier development and performance management initiative for this company. With the right support -- which he is currently mustering -- this SPM program could in fact lead to a new foundational series of investments in sourcing and related areas tied into SPM as a core foundation. Of course this is an approach that companies that aspire to follow an IACCM-school of supplier/buyer engagement would ideally pursue, but it's a situation that we rarely see in procurement, despite the fact that relationships and commitments can lead to better Spend Management overall.

Jason Busch

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