No increase in SRM efforts following supply chain scandals

Gurjit Degun
30 January 2014

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31 January 2014 | Gurjit Degun

A majority of procurement professionals have not put focus on their supplier relations following last year’s supply chain scandals.

This month’s SM100 poll found that just 32 per cent have put more of a focus on supplier relations in the past 12 months.

The results come despite last year's horse meat contaminations and the collapse of a factory in Bangladesh.

Nic Porter, managing director at Procuring, believes there has been an increase in contract management rather than supplier management.

“This is a natural reaction to deficiencies in supply of products or services,” he said. “Supplier relationship management tends to be a two-way relationship whereas contract management tends to be one way – that is to say that effective understanding and management of contracts and having good quality contracts in place is the solution for managing situations like the horse meat scandal.”

Tony Morris, client side procurement consultant at Integreon, added he has put more of a focus on supplier relations but not as a result of any scandal.

“We have increased the focus on supplier management and supplier relations to increase our understanding of the market place and to involve the key suppliers in our business,” he said. “We look at our suppliers as our extended enterprise and have found that they have a lot to add and bring to the party.”

Innocent Mapfumo, buyer at Zimbabwe-based Padenga Holdings, has also put more of a focus on supplier relations “to protect our organisation’s investment by soliciting performance guarantees from our suppliers”.

He said that over the past 12 months, there has been a lot of uncertainty in the country because of the political situation. This led to some companies supplying “sub-standard goods”.

“I encouraged more supplier-customer visits,” said Mapfumo. “This enabled me to have an insight of our suppliers' inventory as well as have an understanding of their operations/production capabilities.

“On the other hand this move enabled our suppliers to have an understanding of the nature of our business, what impact supplying sub-standard goods, delays, etc would have on our organisation.”

Michael Minall, supply chain specialist at Vendigital, also responded ‘yes’. “In some cases, the businesses we advise have been making some more radical changes too,” he added. “One important change has been evidence of some board level commitment to ensuring that supply chain visibility is prioritised and that trusted supply partnerships are nurtured.”

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