SPM and SRM Go Hand in Hand

Global executives share effective strategies and lessons learned in supplier management


In the case of one of C3 Solutions’ retail customers, the company experienced challenges with receiving appointments at the store level. And while C3 Reservations was initially created more for a warehouse environment, Braun and his team were able to demonstrate to the client how the solution could be adopted and tailored to achieve visibility in a retail environment.

“We looked at the C3 Reservations solution and said to ourselves ‘well, if it works for a distribution center that has 250 doors, then surely it could work for our store level,” C3 Solutions’ retail customer confirmed.

Before implementation of the solution, the retail company leveraged up their capabilities to report on activity at the back door, primarily done in a manual, paper-and-pen process at the receiving desk of each dock door. While there were some standing appointments with larger vendors, everything else was based on a carrier call-in scheduling basis which required a phone call and/or a fax to the store.

“A key need for us now is to be more collaborative with some of our key vendors,” continued C3 Solutions’ retail customer. “We want to see, ‘what is the average time that a carrier spends at each one of our stores with their appointments? Are they coming late? Are they arriving early? How far in advance do they pick?’ Our business is hungry for that kind of information. The more visibility you have to the shipment arriving at the store, the better equipped the store is to plan for the next day’s activities.”

Approximately five months after going live with the C3 Reservations solution, the retail customer is now able to put together performance reports that they could provide to their carriers or to their vendors on a quarterly basis. In addition, administering appointment through a single Web portal application continues to be instrumental for the retail customer to see all of its carriers’ activity and be able to report on it.

Additional supplier lessons learned

So how do you drive continuous improvement in supplier management—whether it’s on a performance level or a relationship level?

At Loyola University Chicago’s Supplier Relationship Management conference, decision-makers from such leading companies as Procter & Gamble Co. (P&G), Deutsche Post DHL, Best Buy Europe, Humana Inc., Royal Dutch Shell, Microsoft Corp., SunTrust Banks Inc. and more discussed their challenges and lessons learned; and shared insights as to what companies must factor in to address the supplier discussion, i.e., what’s good, what’s not and when is the right time to terminate a supplier relationship that is just not working anymore.

“For us, it came down to how do we convince the business partners that we have to work with them and complement everything they do—and not compete with them, “ said Eric Goodman, Head of Strategic Sourcing and Supplier Management, Deutsche Post DHL.

To address this effectively, the other part of the discussion that is key, is to identify who within the business is mitigating the SRM or SPM strategy. Is there one main point of contact solely responsible for that, i.e., a single supplier relationship manager assigned to all supplier contracts, new and old? Or is the responsibility spread out among a number of different company departments and executives, based on each contract?

“We’re all doing SRM,” said Kutch. “It’s just a matter of how you’re doing it and how effective you are at it—it’s all about internal alignment. Suppliers have an option. You don’t have to be their customer of choice. Them spending time on their resources can help you get what you need to get done. Share with your suppliers what it is you want them to accomplish and what it is you need them to do,” Kutch stressed to the Loyola SRM audience.

The last factor, and certainly not the least relevant, is with regards to risk and how actions that impact a supplier—regardless of which tier level—will navigate back up the supply chain to its customer, i.e., your business.

“When Hurricane Sandy hit, our entire network went down,” said Goodman. “Our supplier was the one who was actually able to get our network back up, so we can depend on them just as much as they can depend on us.”

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