SIG University Certified Supplier Management Professional (CSMP) program graduate Gicela Isla-Richter breaks down the importance of the selecting the correct sourcing business model and the levels of supplier management.
The CSMP course has provided me with the tools and methodologies to help my company ensure that the supplier provides value and complies with applicable internal and external business rules. Equally important, we can better mitigate risks and work more effectively by providing the right amount of effort to manage and build a collaborative relationship with its key suppliers.
Not all suppliers should be managed the same way: each supplier requires a “right-sized” level of governance!
What is Supplier governance?
It is a framework mutually agreed upon by the buyer and supplier. It establishes and enforces rules, distributes authority, defines working environments and identifies risks.
Depending on the importance of the service or product, supplier governance can span through multiple levels of company governance: i.e., corporate, business unit, and contract governance.
Gicela Isla-Richter, Enterprise Risk Manager, Investment Industry Regulatory Organization of Canada
SIG University Certified Supplier Management Professional (CSMP) program graduate Adrienne Westerfield outlines how supplier governance programs and relationships are extremely beneficial to all stakeholders involved and can help drive business success.
What is a governance program? During the SIG University Certified Supplier Management Professional (CSMP) program, while learning unfamiliar governance terminology, I realized I had been involved with creating and establishing various types of governance throughout my career. Supplier governance is a relationship or framework that is mutually agreed upon. Both the company and the supplier benefit from this relationship. The framework can be at a corporate, business unit or contract level depending on the needs and value sought by both parties.
If it is an established relationship that has never been formalized, adding governance will ensure contract compliance. It will mitigate risks for both parties while making sure the objectives of the relationship are met. Over time, the goals for each company may change so that the structure can be re-evaluated accordingly and adjustments made to align with a new direction or specific initiatives. A more structured governance framework will also define the roles and responsibilities for teams, departments and individuals at each company, which will mitigate the risk of any tasks remaining incomplete or done incorrectly.
Adrienne Westerfield, Contract Administrator, Louisville Gas & Electric Company (LG&E)
SIG University Certified Supplier Management Professional (CSMP) program graduate Indre Ciuberke breaks down the importance of the Supplier Relationship Management (SRM) Framework and the four quadrants of SRM communication that adjust the ways of working with suppliers.
When you think about the Supplier Relationship Management (SRM) Framework, it’s not just walking and talking with your Organization partners and having a relationship with them. From my perspective, SRM is based on relationships, however, stressing the communication and information sharing process in the particular relationship. Usually, SRM has corporate attributes such as ensuring the governance, agenda tracking and managing risks associated with the services or products that the supplier provides to the organization.
Every team is focused on bringing value to the organization. SRM can contribute to this is to push the streamlined service delivery by becoming a core internal team in the organization's structure for outsourced service management.
Supplier Relationship Management Team Framework
I have tried to describe the basic SRM as an internal core team framework in the picture above. The idea is based on communication and information flows:
The concept of sustainable sourcing, also known as green purchasing or social sourcing, is nothing new. Sustainable sourcing is impacting nearly every area of corporate business and the consumer’s mindset. Everything from sourcing materials, talent attraction and consumer purchasing habits is changing because of sustainable sourcing growth. However, the term gets thrown around in the procurement industry quite often and is often misunderstood or misused. So, here’s a guide with all the basics you need to know about sustainable sourcing.
WHAT IS SUSTAINABLE SOURCING
First and foremost, we have to define the term. Sustainable sourcing is the integration of social, ethical and environmental performance factors into the process of selecting suppliers. It includes purchasing sustainably preferable products and services (products made from recycled or remanufactured materials), as well as green purchasing guidelines that might pertain to certain products or commodities.
The supplier community plays an integral role in improving enterprise diversity standing. I’d like to share some observations from my career, along with tips for the supplier community and enterprise procurement teams to improve diverse supplier access, expand opportunities and provide support.
A Risky Approach to Client Management
Historically, client management and sales practices have been disjointed and focused on winning by dividing and conquering. A generation of sales teams has been trained to get as much information as possible out of the client organization to sell them what they have, instead of what the client needs, and have been somewhat siloed in the process.
In large supplier organizations, clients doing business with them on the applications side would struggle to engage from the marketing or infrastructure side. This short-sided view usually led to the client chasing the supplier organization to find the right resources.
The "whole client" management approach is necessary to transform the sales process to fit the more modern and sophisticated enterprise customers. Not having a modern sales approach is one area where clients, both Procurement and business stakeholders, get incredibly frustrated when dealing with a supplier organization. Many of the practices considered “old-school sales tactics” have become relatively visible to the enterprise client. For example, taking enterprise employees (particularly business stakeholders) to lunches or dinners at fancy restaurants, sporting events in private boxes and conferences in an attempt to build relationships, with a focus on gaining commitment to sales, early visibility and access to opportunities.
Purvee Kondal, Senior Director of Technology & Engineering Sourcing
Strategic relationship management and governance (SRMG) in the absence of a strong operational framework can be challenging in the best of times. As we are all too aware, these are not the best of times. Over the past six months, we have faced enormous challenges; the speed of change and the need for quick decision-making is unprecedented.
As the world struggles to recover and our workplaces, global supply chains, manufacturing and logistics cautiously rebound from the first wave of the COVID-19 pandemic, we are grappling with what the future holds. Our strategic relationships will require flexibility and scenario planning that incorporates significant uncertainty as we face challenging times ahead.
Partnerships between clients and service providers are being tested like never before. These partnerships require an SRMG framework that adapts quickly to change. You should identify pain points as well as processes or services that must be added or changed to accommodate shifting priorities and workplace requirements.
The pandemic raises many critical questions that must be addressed as we consider what the workplace of the future will look like, and strong SRMG will be essential.
Here are a few critical questions to consider:
Does your contract with your strategic partner have the flexibility you need in the current environment?
Every business has had to adjust during the pandemic. Is your contract holding you to an agreement that doesn’t make sense in the current environment, or requiring your partner to perform in a way that doesn’t suit your current needs? It may be time to renegotiate a new contract that has the flexibility that you and your strategic partner require.
America’s love affair with e-cigarettes evaporated quickly as millions of users were recently confronted with unnerving news—their vapes could actually contain toxic chemicals powerful enough to be deadly.
The CDC issued words of caution on September 27, “Anyone who uses an e-cigarette or vaping product should not buy these products off the street.” The sentiment is clear—consumers need to avoid e-cigs from potentially shadowy manufacturers and distributors fed by an unregulated supply chain.
Duty to the Consumer
E-cig manufacturers have a responsibility to pinpoint precisely what in their products is harmful, just as distributers must be confident they are only carrying reputable items that are sourced through a responsible supply chain. Many vaping products have been found to contain illegal synthetic marijuana, even when consumers believed they were buying THC-free products such as CBD pods.
In an industry as young and unregulated as e-cigs, it’s not surprising an unknown health consequence was lurking on the horizon. Consumers had no idea what ingredients or manufacturers to be wary of because no one yet knew there was a concrete hazard.
Liz Mantovani, CSP, CSMP, C3PRMP, Director of Operations, SIG
SIG University Certified Supply Management Professional (CSMP) student, Justin Kline, works at Canon. In this blog, he shares his learnings about the pivotal role of executive sponsorship in governance transformation and how his team plans to implement some of the best practices within his job function and organization.
In this program, SIG University students will comprehend the significance of governance, risk and compliance. They’ll understand the various levels of supplier management governance, including corporate, business unit and contract level activities. They are also able to select the appropriate governance program, and key components, for each relationship model. They gain an effective understanding of how to capture and activate innovative ideas through the governance structure, in addition to describing the critical tools to use in implementing a governance program.
At Canon, I am responsible for scoping and delivering outsourced services to our customers. Today, our customers are looking to Canon not only to take over a business process but also to assist or lead the transformation of the process simultaneously. These types of projects require more time, resources and investment by both sides to achieve targeted results. This level of investment and risk makes these projects higher profile.
With so much attention currently focused on the political arena (most obviously, of course, in the USA with the inauguration of President Trump) it’s easy to become carried away in one’s assessments of the extent to which “politics” drives actual change. Of course, there’s no doubting the scale of the significance of the Trump election, or the Brexit vote, or similar “watershed moments” – but the nature of that significance is somewhat less clear, especially when it comes to the impacts on specific aspects of our lives. It’s somewhat comforting (or perhaps not, depending on one’s affiliation) to think that the person nominally in charge of a country is indeed that – it plays to our natural human desire for order, comprehensibility, justice – but in a world as interconnected and complex as this one, is it not a serious error to overstate the ability of a President Trump, a Prime Minister May and others in similar positions around the world truly to steer a course, rather than simply to keep their ships of state upright in the storm?
Look at the sourcing and outsourcing space specifically. In a number of particular areas President Trump could well have a huge impact: a crackdown on immigration and the offshoring of work, changes to NAFTA, the reversal of the ACA and other policies would affect very substantially certain tranches of the space and those working within them. Likewise, in the UK the way Theresa May is approaching the exit from the EU and the Single Market has deep significance for businesses working in and with the United Kingdom for data protection, for accounting and a host of other areas.
I'll admit it. I was pulling for the Broncos. I know there are two sides to every story, and something preceded Richard Sherman's less-than-gracious on-screen comments in his interview with Erin Andrews after the 49ers playoff game...but all I heard were HIS comments, and they were enough to turn me into a Broncos fan for the Super Bowl. Of course, the fact that Seattle beat my home team to GET to the Super Bowl was also a contributing factor...but I digress. The real reason I bring up yesterday's lopsided game, was that in a very strange way, it made me think about governance and supplier relationships. Why, you ask? Well, it's simple. If you don't set out the terms of a relationship and have a proper governance plan in place, you can end up with a very imbalanced set of understandings, which can have a disastrous result. In a blog posting on governance several months ago, I spelled out my thoughts in a detailed manner, including organizational structure, stakeholder involvement, cultural alignment, milestones, deliverables and goal linkage. Without a doubt, those are all critical, but for the purpose of this "post game report" I'd like to focus on what I consider to be two of the most important components in just about anything.