Supplier Relationship Management (SRM) Research 2012-2013

Transcription

Supplier Relationship Management(SRM) Research 2012-2013Solution Analysis and Business Insights

Supplier Relationship Management (SRM) Research 2012-2013SRMPrepared and edited by:Sarissa AlleijnFleur BaarspulMerel PlanteSpecial thanks to:Thomas DahmMarjolein DijkshoornTon van DolderErick HaagBart HellingsKevin LemmensMartin PuttersKirsten SchipperTorbjÖrn ThorsénA note of thanks .Capgemini Consulting would like to extend its thanks to the vendors who made time toparticipate in the Supplier Relationship Management Survey. Without their cooperation andsupport, research of this nature would not have been possible.

Supplier Relationship Management (SRM) Research 2012-2013Table of ContentsPagesForeword 4Business Insights 7Functionality Analysis 25Supplier Profiles 57

Supplier Relationship Management (SRM) Research 2012-2013ForewordDue to the challenging economic conditions of the last few years, many CPO’s have reverted to the old school methods ofprocurement: achieving savings through squeezing suppliers and contract renegotiations. We feel this trend is unfortunate as theeconomic situation currently creates numerous opportunities for procurement organisations to achieve savings while creating longterm, sustainable relationships with suppliers.How can procurement organisations respond to the need for short-term savings while simultaneously focusing on long-termsupplier development? We developed the “Seven Strategies for Future Procurement”, which is a practical framework to assistCPOs in creating best-in-class procurement organisations. Regardless of the maturity of the organisation, these strategies shouldbe included in the strategic plans for the coming years.Below is a high-level look at the “Seven Strategies for Future Procurement”:Closed Loop ProcurementMany procurement organisations are still struggling to master the basics: spend visibility and, sourcing and contract compliance.Establishing closed loop procurement is a major achievement and an end goal in itself for most procurement organisations.This strategy involves optimising the basic infrastructure for procurement, from source to pay, in processes, organisation andsupporting IT systems.Hybrid Organisation ModelsAt a functional level, we see a trend towards hybrid organisational models that combine the benefits of central coordinationwith improved business collaboration. At a category level, we see further differentiation in organisational models depending onbusiness, category and supply market specific characteristics. A one-size-fits-all organisation design is no longer good enough.Gain all of the benefits from different organisational models and shape your own future procurement organisation.Supplier Value ManagementLeading procurement organisations manage collaborative supplier relationships to extract more value from the supply base.Creating value is on every agenda, but capturing this value is difficult. Utilising a hybrid organisation model, you will be able tomanage different categories in a diverse manner. It is our belief that innovation is the driver for creating value. Use InnovationDriven Procurement (IDP) to accelerate the pace of innovation within organisations by leveraging the innovative power of thesupply base. (For IDP see Business Insights Chapter).Supplier Risk ManagementIncreased dependency on external suppliers, volatility in raw material and energy prices, shortage of key materials, currencyimbalances, and global financial crises have all made companies recognise once again the importance of supplier riskmanagement and overall resiliency in the supply chain. Looking at the outlook for 2012, we believe risk management willbecome even more important in the year ahead. Risk management will be central to procurement, combining risk, innovation,sustainability, preferred customer strategies, and supplier management.End-to-End Supply NetworksLeading procurement organisations manage multiple supply networks that differentiate service characteristics by product/marketsegment. Managing complex supply networks requires pipeline visibility and alignment of planning and control across multipletiers of suppliers.Talent DevelopmentFor years we have seen that CPOs around the globe indicate that talent is the fourth biggest challenge for “marketing”procurement within their own organisation. We strongly believe that talent will be the key driver of success for procurementorganisations in the years to come. Leading companies have recognised talent as the key enabler for further developing thesupply management function, and are investing heavily in attracting, training and retaining top talent.4

Supplier Relationship Management (SRM) Research 2012-2013Technology LeverageLeading supply management requires technology that is more user-friendly, provides real-time visibility, is better integrated,enables more effective collaboration with the supply base, and has more powerful analytic and simulation capabilities.This last “strategy” for future procurement, in particular, is a key enabler for realising most of the other strategies. This is whythe choices in technology should be an integral part of the procurement strategy. Our 2012 SRM survey will help to explore thetechnology development areas for your organisation.As part of the procurement transformation business, we see it as our mission to deliver high performance and robust results toour clients. The results not only impact procurement departments, but also stretch to other business areas. To deliver qualityresults and benefits, we continually develop our thought leadership in the business marketplace. We track recent developments inSupplier Relationship Management (SRM) solutions, conduct surveys, and evaluate our previous initiatives in order to build a richknowledge base of lessons learned from our client and supplier experiences.We are pleased to present to you the Supplier Relationship Management (SRM) survey 2012-2013. It is interesting to see that overthe last twelve years that we have been running this survey, the market for SRM is still growing and investing in these applications.This year’s Supplier Relationship Management study consists of three parts:1. SRM Research: Business Insights—our thought leadership from around the globe, related to the priorities of today’s ChiefProcurement Officers (CPOs) and the Seven Strategies for Future Procurement.2. SRM Research: Functionality Analysis—our view of the values you should expect from SRM applications.3. Supplier Profiles: Profiles of all SRM suppliers who participated in our research.The research and analysis is based on a series of questions designed to assess whether the software covers a specific set offunctions within the SRM environment. A new item in our research is our independent view on the different vendors. We havelearnt from previous client engagements that this is valuable information for package selection activities.Apart from the survey, which gives you an overview of the major players in the market, we also want to share the experiences,issues and questions that we encounter on a daily basis as procurement professionals implementing and optimising SRM; thesecan be found in the ‘business insight’ chapter of our publication. We therefore asked our foremost colleagues to share their viewsand experiences of SRM, resulting in four expert opinion stories, each telling something about SRM and procurement, fromdifferent perspectives.Our procurement experts have worked on this study with great care. We hope you enjoy reading it as much as we enjoyed writingit and look forward to your feedback. Let it be an inspiration for your future initiatives.We wish to thank all vendors and colleagues who have contributed to this year’s SRM study.Ton van DolderVice PresidentSupply Chain Management Practice Leader The NetherlandsCapgemini Consulting5

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Supplier Relationship Management (SRM) Research 2012-2013Business Insights7

Supplier Relationship Management (SRM) Research 2012-2013The purchaser as garbage manHow the procurement function can contribute to a more sustainable worldAuthorsErick Haag & Bart Hellings8

Supplier Relationship Management (SRM) Research 2012-2013The procurement function alwaysinfluences multiple supplierrelationships. Therefore, it can playan important role in striving for a moresustainable world. This is especiallyvalid in sectors where the purchasevolume accounts for more than 50% ofthe turnover. Over the past years, a lotof attention has been focused on thissubject. Most of the time, the emphasisis on influencing suppliers; this articlestrives to make clear that this alone isnot enough. Influencing stakeholdersoutside the procurement functionis essential to contributing towardsachieving the sustainability goals ofan organization. The focus is shiftingtowards managing goods returns andwaste processing. Purchasers shouldbe garbage men, from the perspectivethat garbage is not waste but insteadshould be viewed as a valuableresource.IntroductionSustainability was once the domainof idealists, activists and experts.Increasing scarcity of resources, risingenergy costs and stricter policiesmade sustainability a topic for theworld of business. Sustainabilitytargets are nowadays integrated intothe strategies of major companies likeUnilever (100% sustainable purchasingof agricultural products), DSM (One ofthe three strategic pillars for 2020), andNike (considers a closed-loop supplychain essential for future objectives).From these examples it is clear thatin realising the goals that are set,optimising parts of supply chains is notenough. A radical change is needed,demanding a new collaborative wayof working amongst suppliers, clientsand other stakeholders throughoutthe supply chain, including the returnstream. This new model is also knownas ‘closed loop supply chain’, asillustrated in Figure 1.Figure 1: Extended focus area for the procurement function from a focuson the incoming materials to a ‘closed-loop supply chain’ approach.Traditional focus of procurement functionInformation FlowInternal Supply ChainProcurementProductionSalesFlow of goodsSupplier MarketConsumersRecycling processNew focus of procurement function9

Supplier Relationship Management (SRM) Research 2012-2013The changing role of theprocurement function in aclosed-loop supply chainFor the procurement function,sustainability traditionally meantpurchasing goods and services againstoptimal environmental and socialconditions. However, to respond tothe increasing challenges of resourcescarcity and fossil fuel dependency, anincreasing number of organizations aresearching for possibilities to collaboratewith partners in the supply chain andto ‘close the loop’ by using waste asraw material. The development ofthis concept was heavily influencedby the Cradle to Cradle concept thatwas introduced in 2002 by WilliamMcDonough and Michael Braungart.The core of this concept is to reusematerials from used products, toproduce new ones. Maintaining thequality of materials is essential forlong-term success of this model. TheCradle to Cradle concept is alreadyapplied successfully by companies likeAuping, Desso, Forbo Flooring and VanGansewinkel.10 When this concept of reusing materialsis applied on a large scale, this has amajor impact on the traditional role ofprocurement. The strategic value of thegoods return stream increases and thevolume of newly purchased materialswill decrease. However, this modelwill have a major impact on existingsupplier relationships. For example,when suppliers collaborate actively onoptimising recycling opportunities, theywill be ‘rewarded’ with less orders fornew materials.In assessing the strategic value ofa supplier, a shift will occur from astrictly financial perspective on thestrategic value to a ‘triple bottom line’perspective, based on the value forpeople, the planet and profits. Thismeans that suppliers who are activelyinvolved in recycling and recycledmaterials supply will be able to maintainor even increase their strategic valuefor clients.

Supplier Relationship Management (SRM) Research 2012-2013Optimising a closed-loop supplychain has more impacts on theprocurement function. For example,the procurement function will playan active role in selecting partnersin the recycle chain, and in selectingthe right suppliers based on theircontribution to a closed-loop supplychain. Category teams will have tomake different choices, based on ‘triplebottom line’ principles, including allelements of a closed-loop supply chain.Furthermore, new category teamswill be established based on the newcategories from the return stream ofmaterials. Planning and managing theflow and volume of materials becomesmore complex because there aremore reused materials to be collectedand processed. New processes andsystems need to be implemented tomanage a closed-loop supply chain.Examples include getting productsback from users, maintaining quality ofthe return stream, handling informationon traceability of products and planningthe input of a combination of new andused materials.Implementing the changeConclusionThe impacts that were describedearlier provide a vision on what theprocurement function would look likeafter successful implementation ofthis type of sustainability policy. It isunrealistic, and often undesirable, toreach the final stage in a very short time(within less than a year), as the requiredchange is too fundamental. Therefore,an implementation plan should becarefully developed; such a plan couldbe made per category, for example,by starting with the highest ecologicalfootprint. Alternatively, it could beplanned per end product, which ismore complex, as an end productcontains a variety of materials. Focusand speed of the plan heavily dependson the organisation’s goals.The procurement function playsan important role in reducing theecological footprint of

Supplier Relationship Management (SRM) solutions, conduct surveys, and evaluate our previous initiatives in order to build a rich knowledge base of lessons learned from our client and supplier experiences. We are pleased to present to you the Supplier Relationship Management (SRM) survey 2012-2013. It is interesting to see that over the last twelve years that we have been running this survey .