How to Live Your SRM Dream and Avoid a Nightmare

“Vision without action is a daydream; action without vision is a nightmare”.

Different people have been credited with this saying over the years so I’m not sure who actually said it first. Nevertheless, I can see far more than a grain of truth in its sentiment.

Take SRM (supplier relationship management) as an example. I have come across many organisations who claim to be “doing SRM” and they often have a vision of what they want it to do (innovate, reduce costs, reduce supply risks and so on).

There are also a lot of people writing about SRM, articulating the same type of things for a vision.

What is rarer though is someone articulating how to systematically translate their vision into actions and projects that deliver their vision. Even rarer is talk about how to set a joint vision for the relationship with their key suppliers and then turn that into reality.

Too often it’s about governance arrangements, communication plans, KPI’s and scorecards. The unspoken inference is often that action is down to the supplier to make with the buying organisation setting the ground rules and monitoring progress. As a consequence, these programmes often run out of steam because the supplier is getting too little out of it to justify the time and effort put into it.

At the other end of the scale are those who treat talk about vision, mission and culture as “fluffy nonsense”. These are the people who are “busy, busy, busy” taking action with no reference to an over-arching agreement as to what that action needs to achieve. As a result, there is lots of unfocused activity that consumes a lot of time and other resources but which generates more “heat than light”! These are the true bringers of nightmares.

So here is an eight step plan for creating and agreeing a vision for your critical supplier relationships and then turning them into a focused, value-driven action plan.

  1. Make a list of what you want to achieve through your relationship with your critical suppliers and find a link from the things on this list to your corporate goals. These are your “reason why” you should be running a SRM programme – invaluable in mobilising support from your peers, Executive Team and other influential stakeholders.
  1. Ask your critical suppliers to do step 1 for their own organisation.
  1. Sit down with each of your critical suppliers in turn and compare your list with theirs. There will be some things on each list that are complementary. These are the key initial focus for your partnership and form the basis of your joint vision.
  1. Do a 3600 review with your critical suppliers in which each party assesses both itself and the other party. This will give you some important gaps in the way you both approach working with eacvh other – gaps that if filled will significantly improve performance.
  1. Run a workshop or focus group with each supplier separately and look at the output from steps three and four. Agree on those that gaps that you should jointly investigate further.
  1. Run focus groups that include staff from both organisations and task them with coming up with reasons for the gaps. Simple analysis tools such as “the 5 Whys” work very well in these circumstances.
  1. Allocate roles and responsibilities for addressing the output from step 6 and fix the problems.
  1. Rinse and repeat steps 5 to 7.

By finding these gaps and taking action to close them, you will not only improve performance and deliver value but just as importantly you will lay the foundation for a workable continuous improvement programme – living your dream without having nightmares!

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