APQC

In APQC’s consortium best-practice study and report, Supplier Relationship Management: Collaboration for Win-Win Competitive Advantage, leading organizations share their secrets for rationalizing their supply bases to include only the strongest, best-performing, and most collaborative upstream partners and leveraging those partnerships to reduce cost, improve quality, and increase customer satisfaction.

The study focused on:

1.  Designing a supplier relationship methodology to establish value-added upstream partnerships
2.  Establishing a collaborative environment and synchronizing the supply chain
3.  Using processes, tools, and technology as an enabler of a collaborative environment and synchronized supply chain
4.  Measuring the success of the supplier relationship methodology and providing for continuous improvement

The first chapter in this report focuses on Supplier Relationship Methodology. The study's best-practice participants have incorporated their supplier relationship methodology in both their business strategy and culture by embracing it from the top of the organization through to individual process performers, implementing the concepts cross-functionally and driving them home in the reward and recognition systems. Each participant adds his or her own unique enhancements to processes, infrastructure, support tools, and a collaborative culture to make their strategic efforts relevant to their stakeholders. However, regardless of industry, organization size, or geography, best practices roll up to common themes.

The key findings in this chapter relate to how the best-practice partners in this study design a supplier relationship methodology to establish value-added upstream partnerships in which internal and external stakeholders work together to achieve common goals. It determines critical success factors such as senior-leadership support and the importance of developing internal talent to implement and drive a successful strategy. It examines how best-practice partners gain stakeholder support by determining the needs and objectives of each internal process area and how each area integrates cross-functionally as well as with suppliers and customers, exploring the effective use of cross-functional teams in supplier relationships. It describes how organizations transcend differences in corporate cultures to identify strengths, weaknesses, and opportunities for synergy.

The findings in this chapter are:

·         Partnering with suppliers and integrating supplier relationship methodology into strategic sourcing initiatives improves supply chain effectiveness and customer service.
·         Effective SRM aligns with corporate goals through cross-functional strategic initiatives involving cross-functional teams in supplier relationships.
·         A supplier relationship initiative must be recognized and supported by the entire organization.

Many organizations turn to supplier collaboration to improve operations. The research uncovered that, although companies leverage numerous initiatives to achieve corporate goals, supplier collaboration was the only initiative unanimously selected by best-practice partners. By contrast, only 50 percent of other companies collaborate with suppliers.

To learn more about best practices in Supplier Relationship Methodology, read this entire chapter from APQC.