Putting Suppliers at the Centre of Your Organisation (pt 2) – Looking at Supplier Lifecycle Management

You can now get our briefing paper titled Putting Suppliers at the Centre of Your Organisation here, free on registration from the BravoSolution website.

It is linked to our recent Real World Procurement live sessions (London and Dubai) on that topic and also our webinar, now available as well through that link if you want to listen again.

The Paper covers issues such as the way the focus of procurement has developed over the years, supplier lifecycle management, and how organisations can capture competitive advantage from their supply base. We’ve given a short extract below from the Paper.

And there may still be a couple of tickets left for tomorrow - the next Real World Procurement event is on April 13th in London, 11am – 2pm. Guy Allen will talk about “Driving Value from your Sourcing Process” – you can book here.

 

PUTTING SUPPLIERS AT THE CENTRE OF YOUR ORGANISATION

Supplier Lifecycle and Value Management

If asked to describe the task or the core processes that form the basis of procurement activity, most professionals will talk about two cycles.

The operational or transactional process cycle relates to the financial and physical procurement transaction, and is often referred to as “purchase to pay” (P2P). It normally starts with a requisition or requirement, then generally moves on to production and communication of a purchase order, a delivery record, receipt of goods and services, and concludes with invoicing and payment.

The strategic or strategic sourcing process cycle is the more “strategic” element of procurement, starting with establishing the internal requirement, executing market and supplier research, then into the supplier selection process (PQQ, RFX etc.) and contracting / negotiation. This moves on post contract award into contract and supplier management in various forms. ­

While this approach is easy to understand, it has a number of flaws. The cycles are separated and so important linkages between them can be overlooked. For example, some form of supplier selection must occur (a strategic activity) before a purchase order is placed in the transactional cycle. Most importantly, the two cycle approach is focused on the buyer’s processes and therefore misses a common and critical factor that runs through the entire procurement task – the supplier.

So we suggest that a third process should be considered, which gives a somewhat alternative world-view – the supplier management process, also termed supplier lifecycle management (SLM), designed to manage the supplier effectively throughout the whole relationship between buyer and seller … the purpose of SLM, is: to recognise suppliers as a prime source of value to the organisation and deliver that value by putting them at the heart of procurement strategy and management.

What we are talking about here is both a philosophy and a practical approach to process management that puts the supplier at the centre of the procurement approach.

(Download the Paper now to read on!)

 

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