How to Build a Supplier-Centric Culture

Among the top ten priorities in procurement, The Hackett Group’s 2024 Key Issues research put Supplier Relationship Management (SRM) firmly in the middle behind data analytics and reporting, talent management, category management, and strategic sourcing. You might argue that SRM deserves to be higher up this list, but there’s also a strong argument that if you get the supplier experience right, you raise the potential for success on almost all priorities above SRM. 

In the first blog in this series, we discussed why the supplier experience matters more than ever, and in this one we’ll be sharing the internal view of supplier experience and how to put first-class supplier experience strategies into practice. 

Hint: it involves procurement-specific technologies and a cultural shift.

It’s important to note that this discussion extends beyond standard SRM to the next big pocket of value – optimising the end-to-end supplier experience through holistic Supplier Experience Management (SXM). Because while SRM focuses on the interactions between your organisation and your suppliers, SXM refers to the practice of creating the conditions in which you and your suppliers can thrive together. The ultimate goal is to establish trust and transparency, building relationships that ensure mutual success for you and the supplier.

Technology for Improved Supplier Experience

Organisations are increasingly putting a high priority on strengthening their relationships with suppliers, and one foundational way is through the implementation of systems that enable real-time collaboration with their partners. Building a strong supplier relationship requires a deep understanding of suppliers’ capabilities, plans, and objectives, ensuring alignment with both business’s needs. 

All of which makes it essential to have a centralised, searchable database of vendors that is accessible from all locations. This eliminates the need for spreadsheets and other manual systems. Instead, you get a single source of truth for all supplier-related information. 

Data and Analytics topped The Hackett Group’s procurement priority lists of 2024, and for good reason. Implementing centralised systems that bring together supplier data from third-party systems, in real-time, puts the most current supplier information into the hands of all stakeholders. 

Automation is another strong ally on your SXM journey. Every best in class supplier management platform incorporates automation to streamline processes like vendor onboarding, accounts payable, and purchasing. These types of automations will save your team plenty of time. And that’s time that can be focused on more strategic activities that add value to your supplier relationships.

Cultural Shifts for Improved Supplier Experience

Technology can do a lot of heavy lifting, but it’s important not to overlook the cultural aspect. Encourage a culture where employees are proactive in identifying and addressing potential risks within supplier relationships. This involves training staff to recognise early warning signs and empowering them to take corrective actions before small issues become significant problems.

Perhaps it is an obvious statement, but open and regular communication with suppliers helps build stronger relationships. It means going beyond standard interactions with account managers and establishing genuine connections by asking insightful questions and delving deeper into supplier operations. Your team will begin to have a deeper understanding of your suppliers challenges and be better positioned to work together collaboratively on solutions to improve the quality of products, or ensure more timely deliveries

Developing your team’s skills and knowledge helps too. This includes training on new technologies, best practices in supplier engagement, and having everyone understand the strategic importance of supplier relationships. A team aligned on the importance of your supplier experience initiative and well-trained in how to achieve this will be better equipped to manage and improve complex supplier networks and drive continuous improvement.

SXM – Where to Start?

There are some key areas of focus on your SXM journey:

1. Invest in advanced technologies, such as centralised supplier management systems, to streamline interactions and drive cross-company efficiencies.
2. Develop open lines of communication with suppliers, ensuring that both parties are aligned on goals, expectations, and challenges.
3. Work towards common goals that benefit both the supplier and your organisation, think more partnership and less transactional.
4. Address potential issues early on through regular audits and continuous monitoring, preventing small problems from becoming major disruptions.

In a highly interconnected ecosystem – like the one between your organisations and your suppliers – the way you manage supplier relationships will have a profound impact on your business success, and your end customers. Ultimately, adopting SXM, will boost the supplier experience but also create a more resilient and efficient supply chain moving forward.

Missed the first instalment of this series? Read ‘Why Procurement Must Focus on Supplier Experience’ here.