Consider the Suppliers’ Perspective to Remove Friction and Become a Customer-of-Choice
The disruptive events at the beginning of the decade have made many organizations realize how dependent they are on all of their suppliers, not just the strategic few.
According to Dr. Elouise Epstein, Partner at Kearney, “The way we work with suppliers has to change. “Traditional technology is wholly inadequate to support the digital evolution. There is a mountain, an overwhelming amount of evidence, to say that the way we’ve done it in the past doesn’t work. It’s abundantly clear that we have to do something different.”
This has led to businesses moving away from the more traditional, Supplier Relationship Management (SRM), to a more holistic approach, Supplier Experience Management (SXM), which shifts the focus from simple cost-savings to enabling all suppliers to do their best work and setting them up for success.
These organizations understand that:
- They themselves cannot be successful if their suppliers are not successful
- By taking care of their suppliers, the suppliers will return the favor
- Their suppliers must be seen and treated as an extension of the organization, in order to become a customer-of-choice
of suppliers say, “We find it challenging to do our best work for this customer.”
is the average number of systems a supplier has to log in to to serve their most important customers.
of suppliers in the survey stated they spend too much time on administrative tasks for their most important customers.
of suppliers say they find it difficult to resolve queries with their most important customers.
Suppliers’ Perspective: Why it Matters?
Why care about your suppliers’ perspective?
Part of adopting Supplier Experience Management (SXM) is about considering the suppliers’ perspective, asking them about their opinion, and listening to what they have to say.
Supplier experience is currently full of friction points, it is not integrated and it’s difficult. On the other hand, employee experience models have proven to be successful and effective in removing various friction points. By adapting the theory and conceptualizing it, the suppliers’ experience can be greatly improved. In turn, the buying organizations themselves reap the benefits.
Learning about the suppliers’ perspective is more than sending out a generic annual survey; it is about developing personalized relationships with suppliers and tailoring their experience accordingly.
Caring about the suppliers’ perspective and personalizing their experience accordingly, ultimately, benefits the buying organization. If they provide a great experience to their suppliers, buying organizations can expect to become a customer-of-choice which comes with various benefits, such as:
- Lower prices and better service
- Greater levels of collaboration
- Higher supplier engagement
- Better quality of data
- Lower levels of risk
- Higher levels of compliance
Negotiating Your Success: Do Your Suppliers Finally Have a Voice?
Joining Procurement Insights’ Jon Hansen is a panel of industry thought leaders who will provide you with an unprecedented view into the buyer-supplier relationship dynamic, including:
· Supplier Relationship Governance and Supplier Experience Management
· Cost, Value, and Impact Modelling
· The New Global Supply Chain Reality (ESG, DE&I, and Geopolitical)
The Voice of the Supplier Survey
In this white paper, we explore the results of the survey, with recommendations for priorities based on the supplier view.
- The survey results from the suppliers’ perspective
- Why considering the suppliers’ experience is important
- What makes or breaks the supplier experience
- The benefits of addressing the suppliers’ perspective
Making the Voice of the Supplier heard
Supplier relationships are currently strained as there is a disconnect between what suppliers want and need, and what buying organizations think they want and need.
Recent HICX’s own Voice of the Supplier Survey, in which we asked over 500 suppliers who serve enterprise customers in the CPG, FMCG, Aerospace and Defense and Energy sectors about their experience serving some of the biggest organizations in the world, revealed interesting insights.
The results speak for themselves:
- Suppliers are not set up for the most successful outcomes
- The technological and cultural aspects to make their experience better are lacking
- Communication is slow, unclear, and non-specific
Did you know:
25% of suppliers said being provided with more relevant information and feedback would improve the relationship between themselves and their most important customers?
Download the Infographic
Get a visual overview of the Voice of the Supplier survey’s key findings:
- How many suppliers have to log into 10+ systems
- How to improve the supplier-buying organizations’ relationships
- How many suppliers would prioritize orders for their most important customers
And much more…
What can you do?
Focusing on the largest, most strategic suppliers is no longer effective. Voice of the Supplier Survey confirmed that suppliers require one-on-one, personalized relationships in order to remove multiple friction points.
It is only natural that a large supplier with hundreds of customers is not going to have the same wants, needs, and experiences as a small business supplier with a few customers. That is why leading organizations are using hyper-segmentation to categorize their suppliers based on various factors in order to be able to provide them with a tailored experience. Some of these factors are:
Marketing the benefits suppliers would gain in working with the buying organization – such as providing a personalized experience, caring about their perspective and removing various friction points of the relationships – can go a long way in becoming a customer-of-choice.
“The aim is a shift from the mindset of, ‘What can I as a customer get out of the interaction?’ to ‘How will both parties mutually benefit from interactions?’”
Amy Fong, Partner at Everest Group
“We are seeing companies launching supplier experience driven transformations, now they are thinking ‘How do we become customer of choice?’, ‘How do we make it easier for suppliers to work with us?’. They’re trying to institutionalize it in the sense that they are not only thinking about the one top supplier anymore, they’re thinking about the whole ecosystem.”
Ragnar Lorentzen, Chief Commercial Officer at HICX
“It is about creating an amazing supplier experience in order to attract suppliers to work with solutions we put in place, and to get what we need from suppliers. So, the ultimate target is to create a win-win solution.”
Carmen Erhardt, Head of Global Processes, Operations and Digitalization at Henkel
“There is a sense that I get of, let’s call it strategic narcissism. I think it was a phrase coined by one of the fantastic American generals. Now, we need to look at things from the suppliers’ perspective. And that is strategic empathy.”
Adam Brown, Procurement Strategy & Transformation at Maersk
“I think it is important to view it through the lens of the supplier, because it helps you to better understand the issues as an organization that you might have and fix it in a way that adds a lot of value. Some organizations do not realize that they have problems and that is partially because they are not looking at it through the right lens.”
Costas Xyloyiannis, CEO of HICX