Implementing an SRM tool Implementing an SRM tool Business value - - PowerPoint PPT Presentation

Implementing an SRM tool Implementing an SRM tool

Business value & key success factors

Perfect Club

25 April 2013

The functional Purchasing Information System loop

Ordering Ordering Invoicing Invoicing Spend analysis Spend analysis Purchasing performance Purchasing performance Commodity strategy Commodity strategy Delivery Delivery Supplier relationship management Supplier relationship management

Common master Common master

Purchase Purchase 2 Contract compliance Contract compliance Contract elaboration Contract elaboration Negotiation and selection Negotiation and selection Sourcing Sourcing Needs specification Needs specification Action plan monitoring Action plan monitoring strategy strategy

master data master data

Buyer portal Buyer portal Supplier portal Supplier portal E-RFx E-RFx Purchase request Purchase request

What stands for Supplier Relationship Management ?

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Which business value for SRM tools ?

• SRM tools implementation facilitate the creation of a shared

& common data base within the company

– SRM = Supplier knowledge management tool – But not only …

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Four key stakes to implement an SRM tool

Value creation Risk Supplier

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SRM Knowledge management Risk management Supplier development

At first SRM is not a tool but a process

• SRM tools are enablers to dissiminate within the purchasing
• rganization – and moreover within the company- the best

practices related to the management of key suppliers

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The supplier lifecycle management process

Supplier Risk management Strategic Supplier Relationship management Supplier Portfolio Procurement Dashboard

Category management Needs to source

New Supplier prospect ...

Customer example

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Supplier Information lifecycle management Supplier delisting management Supplier Performance management Risk management

Active Suppliers management

Supplier referencing Supplier Portfolio Analysis management

Yearly Supplier request Supplier panel management

The deployment of SRM is not a quiet journey

• First it requires a good level of purchasing maturity
• The issues are :
• How many suppliers are concerned ?
• Who will do the job ? Update of information & data
• Who will facilitate the process ?

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Suppliers categorization is a key point Suppliers categories need appropriate SRM approaches

Preferred Strategic

200 5 suppl.

Long term relationship Business development

Advanced SRM

Customer example

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Basic Suppliers Core Suppliers Active Suppliers

> 50 000 ~ 10 000 1 500

Performance monitoring Transaction Supplier panel management

Objectives and value proposition for SRM

SRM pursues 4 main objectives

• Managing supplier in smart way to maximize benefits
• Build a consolidated and shared view of suppliers to mitigate risk at Group level
• Implementing optimization action plans and monitor results

Customer example

• Implementing optimization action plans and monitor results
• Defining and sharing roles and responsibilities across the Procurement organization

SRM target will contribute to foster Procurement Performance through

• Better efficiency in supplier management processes
• Strong risk mitigation processes and tools
• Reinforced procurement management capabilities

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SRM would better stands for Supplier Risk Management

Logistic Quality Financial Environment and Safety Sub tier chain control Safety classification Special Process Involvement Design Complexity

Customer example

Environment and Safety Human Resources Geographical, Political, Ethic Manufacturing Capability Design Complexity Manufacturing Complexity Organization / Structure Legal (IP)

Going one step forward with Supplier Asset Management

• A consistent Suppliers database is an asset for the enterprise

as part of the immaterial assets (so called goodwill)

• Extra financial ratio are commonly used now to evaluate

companies on criteria such as : companies on criteria such as :

– Sustainable Development level of maturity – with a high focus on suppliers – Immaterial assets extended to customers base & suppliers long term relationships – See : http://www.observatoire-immateriel.com/

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SRM & ROI : the big issue

• Master data management : enhance the quality of data : identify

current workload and impact of an improved process with a better productivity

• Risk management : potentially high financial losses (supplier

dependancy, reputation of the company,…) versus which gains ?

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dependancy, reputation of the company,…) versus which gains ?

• Knowledge management : supplier button = quick access to a

reliable information with facts and figures on a past period : which gains ?

• Goodwill impact : potentially high value ?

New business models have to be considered

• What is the value of a supplier network for a software

vendor acting as a service provider ?

• Who pays for what services ? Dematerialization ?

– PO sending – PO acknowledgment – E-invoicing – Suppliers discovery – Documents management (legal, regulation, quality certificates…)

• What is the right attitude on buyers side ?
• What is the impact on ROI calculation mode ?

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