Progress in SRM remains steady, says State of Flux research

Gurjit Degun
8 November 2013

☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily 

 

More companies are addressing supplier relationship management seriously for the first time and others are re-evaluating their programmes to accelerate benefits.

 

That’s according to the State of Flux report Six Pillars for Success Supplier Relationship Management Research Report 2013 which surveyed 522 people across 425 organisations. 

 

It also found that the proportion of respondents reporting either moderate or significant progress has remained constant over the last two years.

 

“While progress remains steady, we believe that programmes in general need to accelerate,” the report said. “SRM is key to addressing so many supply chain and procurement challenges that it can’t afford to be playing catch up as the business outlook begins to improve.”

 

The study identified five barriers to progress – limited budgets, changing business priorities, stakeholder engagement, quantifying benefits and a lack of supplier support.

 

The research noted a slight reduction to 48 per cent on the proportion of companies that are prioritising collaboration and the creation of incremental value. This figure compares to 55 per cent in 2012.

 

The majority of respondents (86 per cent) believe that SRM will become more important over the next 12 months.

 

The report said: “As many businesses navigate their way back to growth, SRM is perceived as making a positive contribution to address challenging economic and market conditions, improve competitive advantage, and be a vehicle to switch from tactical to more strategic objectives.”

 

The study identified risk as the most important business issue driving investment in SRM. “While cost reduction and cost avoidance remain priorities, customer of choice related business drivers have also gained an importance,” it said.

 

The survey found that around 25 per cent (34 per cent of leaders) said that post-contract SRM-related benefits are worth 6 per cent or more of the contract value. Although 32 per cent said they do not know what the benefits are.

 

It also noted that SRM could be strengthened through improving stakeholder engagement, better IT systems and more investment in training.

 

The report found that 43 per cent of respondents have created a value proposition, however only 14 per cent have communicated this to all impacted stakeholders.

 

It also noted that SRM is “not always being supported by the creation of formal job profiles, skills requirements, training solutions and performance management”.

 

In terms of IT, one in five respondents reported that IT supports SRM “very poorly”, an increase from 4 per cent last year.

LATEST
JOBS
Swindon, Wiltshire
upto £40K base (+ Paid overtime and corporate benefits)
Honda Manufacturing Ltd
Kew gardens, Richmond upon Thames, London (Greater)
£37,000 - £42,500 per annum pro rata, depending on skills and experience
Kew Royal Botanic Gardens
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE