A survey by procurement and supply chain specialist, TiVA, has unearthed the frustrations procurement professionals are currently facing when trying to get the most value out of up to 22,000 supplier relationships and budgets topping £20BN.
And TiVA has concluded that structured relationship management can go a long way to facilitating greater understanding and more effective business with suppliers, whilst extending a procurement budget's reach.
Many of the respondents cited issues specific to their own unique corporate environment but the study found a number of common denominators that fundamentally illustrate that procurement professionals are struggling to deliver to their optimum:
• 76% of respondents cited a problem with harnessing knowledge in the supply chain
• 72% specified difficulty in maintaining supplier profile records across the whole organisation
• 60% stated a problem with their ability to use procurement and supply chain expertise and understanding
Through a further thematic analysis following more in-depth one-to-one interviews, it has also been revealed that:
• There appears to be a shallow capability skills pool for supply chain management. This is particularly true within the construction industry where concern focussed on the management of multiple tiers of suppliers and subcontractors where high levels of scrutiny are demanded to ensure suppliers deliver safely
• Legislative and industry guidelines continue to prove costly given teams have had to scale up their level of internal and external analysis of suppliers to comply
• Control of the supplier base and consistency of data become an increasingly greater issue as organisations grow in size, scale and complexity. Negotiating leverage is decreased as organisational size dictates that only a finite number of suppliers can be managed within the organisations resource base
Former Financial Services Purchasing Forum Chairman and TiVA Chief Operating Officer, Sandy Duncan, said: “Purchasing teams struggle to harness knowledge, maintain effective supplier records and generally have a problem with capitalising on the expertise that exists within the supply chain. As a result their performance, on which they are judged, must be considerably restricted.”
Andy Brown, Chief Executive at TiVA, explains: “”The knock on effect of the issues we have found are easy to see and span everything from organisational wastage through to risk associated with corporate social responsibility compliance.
“It is clear from our findings that there is a fundamental shortfall in the level of support tools and facilities that procurement professionals have at their disposal to help them more effectively manage supplier relationships and fulfil their potential.
“Better managed, structured relationships return deeper levels of insight into an organisations supplier base, helping to overcome many of the issues we have identified. It is this supply chain intelligence that can add significant value to the procurement overhead.
“Technology is now playing a vital role in addressing this situation.”
TiVA's recently launched Profiler solution is currently being used by the likes of Bradford & Bingley and The NSPCC to intuitively capture information that defines individual supplier strengths, evaluates weaknesses and measures how closely they are aligned to corporate buyer requirements.
The solution uses web technology to engage suppliers in an intelligent blind questionnaire process before graphically mapping their responses onto buyer specifications.
The solution optimises the supply management process, saving time and money by empowering buyers to focus positive energy on maximising their supplier base to unlock the true capability of the supply chain.