Elevating Supplier Experience: How Supplier Experience Adds Value
In this webinar on ‘Elevating Supplier Experience’, Tania Seary, Founder of Procurious, is joined by Costas Xyloyiannis, CEO at HICX and Amy Fong, VP at Everest Group to discuss the benefits of improving the way in which organizations work and engage with their suppliers.
In today’s era when companies are relying more and more on their supplier community due to rapid growth, relationships with their suppliers are becoming more complex, trailblazing and harder to manage. It is now more important than ever to focus on acquiring good quality data and establishing processes for effective Supplier Information Management (SIM).
Amy and Costas discuss the following major advantages of putting supplier experience at the forefront:
- It enables better management of collaboration with suppliers
- It drives higher rates of innovation with suppliers
- It allows for information sharing with suppliers and working together on action plans
2020 – The year of ‘supplier data’
Costas starts the discussion by stating the events of 2020 showed the fragility and the dependency large organizations have on their supply chain. He adds, “People saw how something unexpected somewhere could just make these massive organizations suddenly come to a standstill. It presented immediate and urgent challenges for them around risks, agility, visibility, and resilience. I think it has accelerated the need to be looking at things like real partnership, customer of choice, supplier experience, risk and resilience.”
Amy adds that the importance of information and good data has really become a priority of many procurement decision-makers, and highlights how even consumers have become aware of the importance of well-organized supply chains. “What we are starting to realize is that, as we try to transform our organizations digitally, if we don’t have good underlying information we can’t advance!”
Costas further explains how 2020 revealed the shortcomings of organizations that were not yet able to connect with their supplier communities due to the lack of strong fundamentals such as using systems which are too generic and not specialized enough. For example, some businesses are still using Excel to manually manage their supplier data which is inefficient when you have thousands of suppliers. Ultimately, both Amy and Costas agree data has become the top priority in 2020.
Benefits of Supplier Information Management
Amy explains that being a customer of choice for suppliers comes with its own benefits such as efficient support and prioritization of one organization over others. She explains that the focus has shifted to consumer experience, for which suppliers play a crucial role as “[…] building supplier relationships, especially with your most strategic suppliers, but essentially all the way along the process, is critical to business success and customer satisfaction. You have to understand that there is no success for you unless that success runs all the way through.”
It is essential suppliers are involved in the entire end-to-end process, ensuring easy and efficient collaboration throughout. This will guarantee their time is not wasted on tasks which do not add value to all parties. Amy concludes, “These are complex relationships with suppliers and they really require two-way collaboration.”
Additionally, Costas states organizations do not know how to prioritize this internally as they still believe taking care of the biggest, most profitable, and strategic suppliers, as it was years ago, is the most viable solution. Today, such strategy is no longer the best option, as he explains, “For us, supplier experience management is about accepting this shift around seeing all suppliers, and big emphasis on ‘all’, as true partners and then focusing on doing whatever we can do to set them up for success.”
Becoming a customer of choice
On how to prioritize this and become a customer of choice, Amy claims organizations must “Start measuring suppliers’ experience as if they were a customer.” She suggests using various systems, such as Net Promoter Score (NPS), collecting surveys, and a ‘360’ type of feedback. Costas explains that companies in certain industries, such as FMCG and pharmaceuticals, have already been doing this as they understand that better input will deliver better output. Other industries are yet to follow, he warns.
Amy says organizations are making a mistake by focusing on cost as the only value that can be delivered, as they then forgo other types of value. She points out, “What ‘value’ means is different in different situations,” and that what organizations should be doing is engaging with their supply chain and thinking about what they and their customers need and want. Amy urges us not to forget that Supplier Information Management (SIM) is still about people. Organizations should focus on removing the background noise to be able to focus on people, which is where SIM systems really come into play.
Costas concludes there are three major use cases beyond cost savings: enabling collaboration with suppliers; driving more innovation with suppliers; and having the ability to share and drive workflows digitally.
A case for innovation and sustainability
When talking about sustainability within the procurement industry, Costas explains how in the past it was about reputation and brand protections. Nowadays, people are taking it more seriously and building eco-systems for specific categories. As sustainability has a different meaning for everyone, he advises, “Segmentation is key. It has to be all about open communication, and the same approach should be taken with innovation. It is about having a two-way dialogue with the supplier.”
Amy agrees and adds that there are many ways of being innovative, which may not be so obvious, from bringing in new technology to push a product forward, saving on costs, or putting in place a new efficient process of delivering a service. Open communication also includes thinking about what success means for all stakeholders. She concludes, “Innovation is not free and [organizations] need to leave room in their agreements to fund innovative projects.”