Insight Whitepaper | Changing the strategic supplier paradigm

How to use agile thinking to help build joint collaborative relationships

In an ever faster changing world where corporate survival and success require a new agility, it is no surprise that the traditional view of the supply base being there simply to respond to the demand we create is somewhat outdated. Instead, the successful companies of the future are those that view selected parts of the supply base as an extension of the business itself, as well as the rich source of value, innovation and capability that drive new competitive advantage.

How exactly can companies achieve this? Leading expert on Supplier Relationship Management Jonathan O’Brien outlines what we need to do to build high performing strategic collaborative relationships with the critical few strategic suppliers that can make a dramatic difference to our business. He also explains why realizing this requires a shift towards a new paradigm of supplier relationships.

Forget everything you have ever learnt about how buyers ought to manage suppliers. Forget scorecards, KPIs, supplier performance measurement, contracts, arm’s length relationships and quarterly business reviews, and so on. Whilst these established ways still have their place and work for the vast majority of buyer scenarios, let’s take a moment to think differently.

Instead of defaulting to our standard supplier management toolkit, as so often required by traditional procurement approaches, let’s start at a place based upon a belief our supply base holds possibilities that can vastly enrich our business. Then we can figure out how best we can use our limited resources to tap into it. By giving ourselves permission to think like this, we can begin to open up new ways of engaging with our strategic suppliers.

Then, if we are to direct our precious resources towards this to optimum effect, we need some modern agile thinking and action. If we do both these things, a new paradigm for how our strategic suppliers can be the future engine of value for our organization begins to emerge.

In this whitepaper, I will outline how we need to think differently and embrace change if we are to unlock the value possible from the supply base. I will explain how organizations can truly adopt agile approaches to how they do this using a ten step process that begins by challenging the traditional starting point for procurement teams seeking to achieve this goal.