Firms need to do more to engage with stakeholders to improve supplier relationships, a procurement consultancy has warned.
State of Flux said although supplier relationship management (SRM) has definite financial benefits, the level of engagement and support across firms overall is too low.
Speaking at the launch of the consultancy's sixth annual report on SRM, The Journey to Customer of Choice, State of Flux head of SRM Mel Shutes said: “We’re not sufficiently engaged with stakeholder groups. Only 45 per cent of leaders [firms with the most developed SRM] reported strong and active support from senior management. It’s not enough. There’s a lot of work to be done using value proposition to engage stakeholder groups.”
He added: “Only 43 per cent have gathered supplier feedback in the last year. Stakeholder engagement needs to be through the life of the contract and revisited when things change.”
State of Flux said stakeholder engagement and support across senior management and executive, business and operational and suppliers, is far below its optimum level to make SRM work in most organisations. It added that the 45 per cent figure was “cause for concern”, as it was down from 69 per cent last year.
The report also found the level of engagement with stakeholders at a business and operational level had worsened since last year, with only 51 per cent reporting at least moderate support. Supplier engagement was broadly level with last year, with just over 80 per cent reporting a minimum of moderate support.
Only one in seven organisations have a stakeholder management plan in place to support their SRM programme, according to the report. The relationship between this and the low level of strong and active stakeholder engagement “cannot be escaped”, it concluded.