joani scott. what to expect introduction group discussion srm to obtaining superior value wrap up /...
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Group Discussion What Does Superior Value Mean To You and Your Organization? What are You Doing to Achieve Superior Value from your Suppliers? How Do You Measure Superior Value? How Would You Rate (overall) Your Suppliers’ Superior Value Creation?TRANSCRIPT
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Joani Scott
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What to Expect Introduction
Group Discussion
SRM to Obtaining Superior Value
Wrap Up / ?’s / Evaluation
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Group Discussion What Does Superior Value Mean To You
and Your Organization? What are You Doing to Achieve Superior
Value from your Suppliers?
How Do You Measure Superior Value?
How Would You Rate (overall) Your Suppliers’ Superior Value Creation?
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Research – Survey Discussion
ROI & Viable Partnership
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Research – Survey Discussion
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Research – Survey Discussion
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Research – Graph of Survey
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Why are We Here?Value Creation
Few Contracts Encourage Suppliers to Identify Opportunities to Add Value
Lack of Process to ID new Value Creation Ideas
Lack of Incentives for Suppliers to Identify New Opportunities
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Why are We Here?Value Creation
75% of suppliers say they regularly put most-preferred customers at the top of allocation lists for materials or services in short supply on a regular basis
82% say that these customers consistently get first access to new product or service ideas and technologies
87% of suppliers offer unique cost reduction opportunities to their most-preferred customers first Seizing the Opportunity
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Value Creation Customer of Choice
Are you a Customer of Choice?
• Suppliers Consistently/Proactively addressing your organization’s needs ahead of other companies?
• Are you receiving “Preferential Treatment” from all Suppliers (not only the Strategic Partners) providing support for a wide range of business needs?
OR• Do your Suppliers have limited services,
resources available for your needs?
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Value Creation “Customer of Choice”
Preferred Customer / Customer of Choice
• Consistently receive competitive preference for scarce resources (Product Availability)
• Consistently receive most competitive pricing and cost reduction ideas for products and or services
• Reliable Pro-Active Communication from Supplier (Account Rep and Technical Team)
• Additional Value Adds
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Value CreationCustomer of Choice
Becoming a Customer of Choice?
• View yourself as suppliers do
• Use communications with suppliers as an opportunity to uncover “hidden” decision criteria
• Being a customer of choice is as much about selling as it is about buying
• Low “maintenance” / cost-to-serve customers are as attractive to suppliers as low- cost suppliers are to buyers
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SRM To Obtain Superior Value SRM - A MUST!
• Evaluate Baseline for Relationship ID Business / Product & Services Requirements
• Select ID Baseline for Agreements and Performance Set Tactical & Strategic Shared Goals Define Incentive Sharing Opportunities
• Manage Classify: Commodity, Value, Strategic Quarterly Business / Operational Reviews Monitor / Address Gaps in Relationship & Performance
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SRM To Obtain Superior Value Balance of Power – A Must!• Power drives the dynamics of Relationships
Temporary Trust• Equality (Equivalence) Balance• One party drives partnership and requires consent
Contracted Choice - Commitment• Mutual, Duration, Exclusivity• Duration
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SRM To Obtain Superior Value Balance of Power – A Must!• Power drives the dynamics of Relationships
Coordinated • Shared Direction• Shared Values• Shared Risk and Reward
Creative Collaboration• Synergies• Creativity• Consequence
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SRM To Obtain Superior Value
Supp
lier
Procurement
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SRM To Obtain Superior Value
Day-to-Day Objectives• Place/Coordinate Orders• Manage product/service flow • Collect performance data • Escalate issues
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SRM To Obtain Superior Value
Operational Review Objectives• Monitor performance vs. scorecard • Manage cost/value improvement efforts• Resolve issues escalated from day to day• Benchmark supplier to market• Lead supplier development efforts • Track benefits received from agreement
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SRM To Obtain Superior Value Top-to-Top Review Objectives• Conduct high level business and performance reviews • Reinforce/support relationship objectives• Discuss escalated issues from management team • Monitor key new product development
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Wrap UpMetrics: Value Add
Establish metrics that are linked directly to business performance and to customer’s expectations.
• Cash-to-Cash cycle
• On-time performance to contract.
• How do you collectively improve your overall cycle time within your business?
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Wrap UpObtaining Superior Value
Consider suppliers as an extension (arm) of your Procurement and Technology Team
Utilize Collective Intelligence – Early Involvement
Foster a netted integrated supply chain
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Wrap UpObtaining Superior Value
Take the suppliers who are experts in certain domains and weave them together to enable you to collectively create solutions to satisfy your customers’ needs and support your business vision.
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Wrap UPObtaining Superior Value
The Future requires Strategic Positioning, Collaboration, and Value Extraction
Without Effective Relationship Management, most of potential value available can/will be lost!
“Our Suppliers are only as good as we let them be” (David W Johnson, President of Entenmanns Bakeries (1966)
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Questions?
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Credits• ICN: International Computer Negotiations• ICN - Do Better Deals• ISM: Institute for Supply Management• SIG: Sourcing Interest Group• Next Level Purchasing Association• William L. Michels, President, ADR NA
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Thank You!