Leading Supplier Information Management Vendor HICX recently published The Supplier Experience Survey report.
A new survey report reveals 64% of enterprises are disadvantaging themselves during the pandemic by not having strong communication channels in place with suppliers.
With the events of the coronavirus crisis revealing how dependent organisations are on their supply chains, HICX, the leading Supplier Experience Management provider, has published a survey report about supplier-centricity in the pandemic.
The Supplier Experience Survey is the first of its kind and helps enterprises be more competitive by improving the relationships they have with suppliers. The study provides insights from a hundred of the most senior procurement professionals from global billion-dollar organisations, including more than 30 respondents from enterprises with an annual turnover of more than $10 billion. This bird’s eye view of the broader landscape offers business leaders a benchmark to identify any friction points, and therefore opportunities, within their own procurement functions.
“In times of scarcity having resilient supply chains is the best way to gain a competitive advantage. To truly achieve this, enterprises must ensure they have the strongest, healthiest relationships possible with all their suppliers,” said chief executive officer, Costas Xyloyiannis.
“With the changing landscape, businesses are starting to position themselves as the preferred client by offering suppliers a best-in-class experience. Apart from being a good thing to do because it benefits a range of other businesses, paying attention to suppliers’ needs can also result in enterprises being prioritised for the best R&D innovations, stock supplies and service,” said Costas.
Bridging the perception-reality gap
The survey revealed that when it comes to data management and onboarding suppliers, there is a vast difference between what enterprises perceive is working well and the actual experience. While 98% of respondents believe it is effortless for suppliers to submit and update their data, and over three quarters feel they are best-in-class to do business with, some factors that contribute towards supplier satisfaction and success indicate the opposite.
According to the survey, suppliers need to invest a substantial amount of time, which is unpaid and non-value adding, into the customer-relationship. For instance, almost 100% of suppliers need to interact with two or more systems within a single organisation and only 5% have managed to reduce their onboarding period to only two weeks.
“Making these processes more efficient will help suppliers do a better job because they’re able to save on coordination time and reduce errors, which leads to mutual success,” says Costas.
Better communication will unkink the supply chain
64% of respondents cite communication between departments within enterprises and lack of clarity around who to contact for what, as a top three area for improvement. According to Stephen Day, chief procurement officer at market research house Kantar, this casts the spotlight on a persistent pain point. When asked what their suppliers would view as a bugbear, 67% identified that the time it takes to resolve queries needs to improve.
The report found that enterprises are not intentionally trying to frustrate communication efforts, however, the traditional technology landscape and set-up presents barriers to defining, routing and handling enquiries better. Investing in technologies to support digital processes, combined with the right skills, is key to changing this.
Supplier satisfaction needs to move up the ranks
While everyone wants to be ‘customer of choice’ and most assume that they are in a good position for that, the priorities of enterprises show they are not necessarily set up to make this happen. 75% ranked operational efficiencies in their top three priorities, however only 5% are interested in actively implementing the necessary supplier facing tools to help streamline activity.
The tools and processes that can help improve operational efficiencies are frequently overlooked in favour of traditional goals which are often inward-looking, and operations driven. Costas’ view is that a simple shift towards focusing on activities that add value for suppliers can transform entire organisations from the inside out.
Prioritising supplier-centricity to move forward
As procurement leaders navigate the evolving business landscape, organisations should make it a strategic focus to prioritise having the strongest possible relationships with suppliers, for mutual success and the best outcomes.
Because of the need to positions themselves as the customer of choice during periods of low supply caused by the pandemic, many organisations have already started to adopt a more supplier-centric approach to procurement. However, short term internal pressures to prioritise cost saving programmes, could pose a risk to procurement functions returning to a pre-pandemic state.
Those organisations that recognise the opportunity in harnessing and accelerating the progress they have already made when it comes to supplier relationships, will find themselves leaps and bounds ahead of the competition.