Develop Relationship
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Initiate Relationship Management
Initiate Relationship Management covers the tools to facilitate the creation of the supplier relationship strategy and manage its progress through the supplier management process. Kick-off meetings act as a launch pad for the supplier management activities and introduce the team to the purpose, scope, and roles.
Activities
- Consider change management aspects of supplier management
- Create a high level view of project milestones
- Set-up the supplier management team and decision making structure
- Identify & proactively manage stakeholders
- Agree team roles & responsibilities
- Confirm who is to support, lead or drive the supplier management activities
- Share sub-category, supplier & supply market information
- Identify quick win opportunities
- Discuss reverse marketing
- Finalise high level project plan
- Create stakeholder engagement plan
- Confirm action plan plus Analyse Relationship responsibilities
Key Meetings
The pre kick -off and kick -off meetings are key meetings. They should be action orientated with all team members contributing information and ideas.
Analyse Supply
Analyse Supply involves gathering detailed facts and data about the spend, supplier, business requirements, costs and supply chain to input into the relationship strategy.
Activities
- Segment the spend & analyse historic spend date
- Investigate future spend patterns & forecast demand
- Develop spend profile
- Identify existing price models
- Develop total cost management model
- Conduct interviews with key stakeholders to establish their needs
- Document the business requirements and validate them with stakeholders
- Gather supplier data and document key findings
- Establish pricing strategies of key suppliers
- Carry out out supplier financial analysis
- Analyse the supplier’s business strategies
Key Meetings
Specific meetings may be required to allow detailed knowledge sharing and model building. Meetings with suppliers should also be held to gather facts and test assumptions.
Analyse Relationship
Analyse Relationship involves gathering information about current supplier relationship and perceptions of the relationship between the supplier and the company. These are then analysed to understand the areas for improvements and the balance of power between the company and the supplier.
Activities
- Analyse the supplier’s business strategies
- Analyse the supplier’s approach to key account management
- Gather information from stakeholders on their view of the supplier
- Gather information from the supplier on their view of the company
- Determine the overall power and dependency profile between the supplier and the company
Key Meetings
The team should meet to analyse the outputs from the relationship perceptions interviews and agree the improvement opportunities.
Develop Relationship Strategy
Relationship Strategy involves the application of some well established procurement models to identify the most appropriate strategic approach going forward. It should clearly articulate the selected strategy in a compelling and succinct document for the business to approve.
Activities
- Determine the overall power and dependency profile
- Establish sub-category importance to company
- Identify attractiveness of company to suppliers
- Identify match between sub-category importance and supplier attitude
- Use the value levers to identify opportunities
- Prioritise, evaluate & agree the best options to be included in the strategy
- Assess the risks of the chosen option(s)
- Outline the selected strategy and its overall impact on the business
- Agree high level implementation activities and timings
Key Meetings
DG5 decision gate meeting should be held with the sponsor, steering group and key stakeholders to present the findings and to obtain their agreement to the proposed relationship strategy.
Implement Relationship Strategy
Project Implementation reminds of the need to keep things simple, realistic and actionable to maintain a continuous improvement cycle.
Activities
- Ensure each workstream has a clear project plan, timeline and action orientation
- Ensure regular review as key input to relevant supplier meeting
Key Meetings
The workshops to generate the value improvement projects will be cross-functional involving the internal stakeholders and the relevant people from the supplier.
Manage Relationship
Supplier Development is a programme of planned supplier interventions including supplier workshops to develop breakthrough projects. This is followed by rigorous implementation of the projects to secure the additional value.
Activities
- Hold joint workshop & explore trust within the relationship
- Brainstorm other opportunities and capture ideas (value levers)
- Conduct high level evaluation & prioritisation of the ideas
- Agree workstream of activity and action
- In Joint workshop conduct a 360 review of the relationship
- Review destination objective & establish which technique(s) could help to provide new ideas
- Use technique(s) to analyse root cause and effect (e.g. Lean Technique)
- Identify 3rd party facilitator and hold creative facilitated meetings to generate breakthrough options
- Agree workstreams of activity and action
Key Meetings
The supplier workshops should include the supplier enabled innovation projects that will be cross-functional involving the internal stakeholders and the relevant people from the supplier.