The procurement evolution: achieving sustainable SRM
The need for Supplier Relationship Management (SRM) in large and mid-sized organisations is becoming essential to business success as supply chains increase in breadth and complexity. In order to achieve sustainable SRM there are three key elements that need to be in place:
- Communication – as organisations in every market battle to compete and meet customer demand, supply chains have become increasingly complex and global. This means that SRM has never been more important and without clear management of communications between procurement and suppliers, organisations are leaving themselves wide open to relationship breakdowns and an underperforming supply chain.
- Risk identification – the complexities of today’s supply chains means that identifying risk before it escalates and causes major problems is essential. Being able to flag any potential issues such as a supplier’s health and safety certifications expiring or its failure to supply according to the terms of the contract, can prevent serious issues further down the line.
- Transparency – by investing the right resources into building robust SRM practices, procurement teams get real time visibility into supplier performance and risk. This allows them to make timely and informed decisions when necessary, not after a supply chain failure has occurred.
Many organisations have recognised that technology is the enabler to achieving this level of strategic SRM. Our findings from research we conducted earlier this year with 100 UK senior procurement professionals placed SRM as procurement’s top priority for innovation. Many of these practitioners may already be using technology for sourcing and purchasing so it’s clear that SRM is being considered as the next natural place in technology’s role.
For those choosing not to embrace SRM software functionality, the use of manual processes to manage suppliers or a reliance on Excel spreadsheets can be difficult when scaled across a complex supply chain. As a result, multiple inconsistent views of how suppliers are being used and the processes to manage them are created, resulting in inefficient use of the supply chain and hampering the full use of its capabilities.
These manual processes can be successfully be undertaken by SRM software and it enables procurement teams to effectively manage contracts, build relationships with key suppliers and drive mutual benefits and risk reduction in one place through:
- Improved collaboration and communication - Suppliers can access a ‘Supplier Dashboard’ allowing them to become an active participant in SRM processes or use ‘Meeting Scheduler’ to set-up meetings via Outlook integration
- Supplier performance measurement - Flexible questionnaires and scorecards help measure supplier performance against agreed KPIs and SLAs.
- Comprehensive analytics - Suppliers can be compared by sector and tiers and these real-time comparisons can help drive improvements.
- Flexible process management - Built-in intuitive tools allow for the creation and modification of SRM processes, a global process library allows for granular process administration for all suppliers, driving efficiency and innovation.
Each organisation has its own unique requirements when it comes to SRM. Whether the focus is on gaining better value from suppliers, driving innovation, reducing supply chain risk or simply automating existing SRM processes, the module can be adapted to support key objectives.
A level of transparency from one central platform puts you in complete control of your supply chain. Isn’t it time you moved to the next stage of procurement’s evolution?
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Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.