An 8 Step Guide to Launching a Supplier Centric Strategy
Table of Contents
What is supplier centricity?
Being supplier centric means not treating suppliers as a commodity but setting them with the right foundations to do their best work for you. It is a mindset shift that acknowledges that all suppliers, rather than just the strategic few, should have access to a one-to-one style relationship.
It also means that the organization is able to ‘put itself into the shoes of all suppliers,’ and is able to identify ways of removing friction on an ongoing basis, so that suppliers are in a position to deliver the best outcomes.
As Costas Xyloyiannis, CEO of HICX, explains, “It is important to look at suppliers as a partner, rather than a resource, and to work with them in collaboration to set them up for success.”
How can you become more supplier centric?
Most importantly, it requires an end-to-end view of the experience or journey that different types of supplier have with your organization, including all the digital interactions that take place, covering everything from pre-onboarding through to lifecycle management and offboarding, where this is relevant.
This 8-step guide summarizes the key conclusions from our recent Voice of the Supplier Survey and following these points will help to identify, support and improve the end-to-end supplier experience.
The 8 steps to supplier centricity
1. Assess the data foundation in your organization
- Consider how you are currently collecting information from suppliers. For example, during onboarding are you capturing all the information that you need, via a single-entry point for the data? How is data across systems being governed?
- Review how more accurate or additional data might be used for further use cases, if it were made available. For example, one use case might be more advanced segmentation of suppliers. This could be used to improve parts of the supplier experience where it would need to rely on additional fields of data that cover different aspects of a supplier’s profile. This is discussed fully in our previous article in this series.
2. Audit the current supplier experience from multiple perspectives
- It is worth setting yourself a supplier task to fulfil and attempting to recreate the process from the perspective of different types of supplier and as different personas from the supplier-side. The objective is to identify points of confusion or friction to determine how these could be simplified or removed.
3. Identify and close data gaps efficiently
- The pressure on suppliers to provide not only goods or services, but also information back to the customer, is growing substantially.
- It is ever widening to include more detail on areas such as sustainability, diversity, child labor, conflict minerals, circular economy, working conditions, modern slavery, cybersecurity, and many more areas.
- Consider how are these requirements being met, where is new data being stored and how are you managing the workload for suppliers in terms of when and how these requests are being made?
4. Evaluate how information is being communicated to suppliers and how enquiries are handled when suppliers want information from you
- Technology is available to enable a supplier to access an enterprise portal in their chosen language, to view their preferred information, to review the compliance and risk information relevant only to them, or to access important transactional information related to their relationship with you at the click of a button.
5. Identify easy initiatives or quick wins for the organization, review the impact and continue building
- These could be as simple as dynamically customizing your onboarding form so that it only asks the relevant questions of each supplier and measuring the impact on the speed to onboard or providing invoice payment status visibility as a self-service option for suppliers and measuring the reduction in inbound enquiries, for example.
6. Iterate based on the metrics and feedback from stakeholders but always include suppliers in this process
- As the Voice of the Supplier survey shows, suppliers are key stakeholders whose input is sometimes overlooked, even though the experience is being built for their benefit.
- Always be asking: what are the most common points of friction for them, what would increase supplier adoption of tools and what would improve supplier engagement in a demonstrable way?
7. Review the technology landscape with a view to defining a roadmap towards the future state
- With increasing deployment of best-of-breed technologies, it is important to identify the use cases, determine the priorities and roll out solutions according to a planned end state.
- Consider how the evolution of the technologies being used impacts the experience from a supplier’s perspective – what changes for them and how will things change?
8. Measure if you are customer-of-choice on an ongoing basis and set targets for specific outcomes
- Have you run your own supplier survey? When you run a survey, what is the usual scope? Will they cover only strategic suppliers, or will they also capture the views of the long tail? What is the subject matter in these surveys? Will they, for example, relate to overall, end-to-end experiences, or will they be related to services, or specific tools? How often should they be run?
- How would you use the results from surveys to make the case for specific improvements that need to be made and how can progress be defined or shown?
What are the benefits of a supplier centric strategy?
In addition to improved supplier adoption of tools, better supplier engagement and more accurate data relating to suppliers, another key outcome of a supplier centric strategy is a much higher likelihood of being considered a customer-of-choice.
There are tangible benefits to becoming a customer-of-choice.
Our Voice of the Supplier survey shows, for instance, that 73% of suppliers agree that they would ‘go the extra mile’ for a customer-of-choice. This compares to just 49% who state the same for organizations that are simply considered the most important customer.
These are some of the key reasons why supplier centricity is so important.
But it is worth ending on this question for consideration: “If there is another crisis, and if suppliers have a limited amount of stock, who will they be giving their supplies to?” Would it be those who have a supplier centric philosophy, or those that don’t? It’s a question that needs to inform the decisions that enterprises make when it comes to their digital technology landscape and its impact on their suppliers.
Find out more about our Supplier Experience Management software and empower your organization with a supplier-centric strategy.
