There are huge commercial and business advantages to adopting a collaborative approach to key strategic suppliers.
Creating a system that will maintain and develop critical supplier relationships is not straightforward. Often what passes for Supplier Relationship Management (SRM) is a patchwork of inconsistent initiatives, unduly dependent on individual managers.
Efficio’s SRM methodology is proven across sectors and tailored to your individual requirements and priorities.
We provide support to organisations where:
- There is no formal SRM process, or several different approaches and processes across the business
- Supplier managers are confused about the process and its objectives, and lack the required skills and tools
- Key suppliers appear to be underperforming, but there is no consistent way of monitoring or resolving the issues
- Strategic supplier relationships have deteriorated back into a transactional and adversarial mode
- Strategic suppliers find the relationship difficult or frustrating
How we work
Our starting point is supplier segmentation. We often find that any existing categorisation of strategic suppliers is out of date and no longer reflects business realities.
The team delivers a detailed report on the strengths and weaknesses of any current SRM practices. This enables you to understand the gaps between the current situation and a best in class SRM programme. Efficio’s SRM Maturity Assessment typically includes the use of questionnaires, workshops, and one-to-one interviews.
We use this insight to create a version of our SRM methodology tailored to your situation and applicable across all areas of procurement, with comprehensive guidance for user implementation. Supporting tools including eFlow Supplier Lifecycle Management ease data processing and improve the availability of information.
Typically, Efficio will devise a pilot implementation in a chosen area to test and refine the solution. We work where possible in joint teams with your Procurement function to enable upskilling and knowledge transfer, and to obtain buy-in from Procurement staff and other stakeholders.
Clients can then implement the pilot, and after any necessary revision, roll out a single, consistent, effective SRM approach across the organisation.
The benefits include:
- Effective SRM leads to cost reduction both directly and in reducing the burden of dispute resolution
- Better and deeper relationships with key suppliers improves their performance and compliance
- The ability to gainshare with suppliers creates opportunities to uncover and realise new value. For example, through more effective working practices, or early supplier involvement in product development
- More collaborative supplier relationships create more resilient supply chains and reduce the risk of failure
Thames Water has applied our approach, gaining consistency in segmentation and the way it deals with suppliers across the business. The organisation now has transparency as to who ‘owns’ a contract and what they are expected to do, and Procurement teams are better equipped to discuss commercial and performance matters with suppliers. Meanwhile, the tailored SRM methodology is empowering suppliers to work constructively and collaboratively with Thames Water.
For John Lewis Partnership, Efficio devised a SRM model for ‘Goods-not-for-Resale’ after JLP realised that current approaches were reactive rather than proactive, and that commercial leverage opportunities were being lost. A pilot implementation is currently under way.