Unlocking the best performance and value from your suppliers with Supplier Management
Supplier management is the systematic approach to get the best value and risk reduction from your supply chain through the lifetime of your relationship.
If you have any doubt about why you need to spend resource on supplier management, consider this:
Organisations often spend more than 50% of their revenues with suppliers
55-65% of innovation comes from suppliers
On average, supply chain disruptions decrease shareholder value by nearly 11%
Managing suppliers effectively can differentiate you from your competitors and give you an advantage in your marketplace.
The benefits of a high-quality supplier management approach
There are measurable benefits of well-structured supplier management.
Organisations that lead in supplier management can deliver average savings of 3-4% on an ongoing basis.
Reduced third-party risk
Although hard to quantify, reductions in third party risk can include supply disruption, reputational damage from impacted customer services and less harmful news impacting shareholders.
55-65% of innovations are typically sourced externally, and 25-45% of revenues across all sectors come from product innovations.
Our Approach to supplier management
Future Purchasing helps you build a value-driven approach through consistent and coordinated coaching, training and consulting.
The three fundamental foundations of our market-leading methodology are segmentation, performance management and relationship management.
Segmentation in Supplier Management
Our approach to supplier segmentation links business strategy to supplier management, ensuring that we are focussing in the right areas, with the right amount of resource. This is not a static model and will require regular review. It is important that both parties commit to working on joint value creation opportunities. Building this reality into the process means that we can optimise what we are achieving with the supplier base at any one time.
Understanding the performance we are achieving with suppliers is core to making sure we are achieving the value we expect from our category strategies and our contracts. It is well known that the amount of value delivered decreases from the point of contract signing unless we take an active role in managing that delivery. Our starting point is having great performance measurement approaches in place. From here, we can work with suppliers regularly to make sure that performance meets the levels we agreed. If there are issues, we can use well-structured performance improvement tools to deliver the value we expect. This often addresses areas of broader risk management as well as any specific improvements needed.
A small number of suppliers are often crucial to delivering our organisational strategies. For those suppliers, we need to make sure we have great alignment between what we need to achieve, and the supplier’s focus and capability to deliver those outcomes. By developing the appropriate supplier relationship management strategy, we can manage these essential relationships.
Our supplier management toolkit is fully developed, with a wide range of individual tools, templates and guides that help your teams develop the right approaches and the best outcomes with your suppliers.
We reinforce the linkages between supplier management and category management to obtain consistency of process, tools and techniques wherever possible. We aim to make these ways of working simple to understand and easy to use, as they are as likely to be used by business stakeholders as they are by procurement professionals.
This is supported by our world-class education programs, which include both formal training sessions and workshops that address your supplier challenges. We also provide a range of coaching and mentoring approaches to ensure that your team not only understands the concepts and tools but can implement them effectively.
Included in our approach is the full suite of behavioural and change management tools necessary to lead a supplier management programme successfully. This includes a range of stakeholder engagement and communication approaches, designed to encourage the co-creation of performance and/or relationship approaches and deliverables.
What does it take?
Achieving a value-driven approach to Supplier Management and getting the right outcomes often takes time and effort, as we need to develop the right relationship with suppliers, even when the relationship history has been challenging. Making sure that there is a well-managed approach ensuring that delivery stays on track is a factor in maximising the delivery achieved. Our programs all contain progress reviews, resource reviews and checks on the quality of outcome to make sure you get what is needed.
How we can work with you to deliver excellent supplier management outcomes
Our consulting, coaching and training services deliver supplier management excellence. They are available to both procurement professionals and stakeholders alike.
We blend and customise our three core services to fit your team’s requirements.
We facilitate working sessions with procurement, stakeholders and key suppliers. We also provide coaching for procurement teams to ensure that the right skills and approaches are adopted.
Our training combines strategic analysis and planning tools with supplier and stakeholder focussed skills-building. They are led by trainers with deep experience in both supplier management, category management and supplier negotiation.
Our highly experienced consultants plan and execute supplier management strategies. We do this for high-value, high-impact suppliers where internal capability or capacity is missing. We integrate our supplier management process and toolkit.
Other Areas of Expertise
We work with you to understand your broader strategic environment, and then identify the categories and suppliers who are most able to bring additional value in those areas.
Excellence in Category Management gives multipliers of value delivery compared to less effective programs. Our approach, delivers a high performing team and process which provides sustainable value over years rather than months.
Our procurement centred negotiation approach links core category and supplier management insights to essential negotiation skills and practices. We can embed advanced practices in your team to allow access to a 50% uplift.
Organisations with focused supplier management programmes in place have realized an additional 23% of value.
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