SIG University Certified Supplier Management Professional (CSMP) program graduate Kaila Flynn shares how to maintain supplier management from a sales perspective and provides a great reminder of how important relationships and the aspects that make relationships successful are in business
Kaila Flynn, Sales Executive, Sourcing Industry Group
SIG University Certified Sourcing Professional (CSP) program graduate Thomas Moran shares the different types of KPIs that are vital to an organization and the importance of performance management.
A KPI is a Key performance indicator; this is a measurable rate or value that demonstrates how effectively and efficiently a team or objectives is performing. Many companies use KPIs to evaluate success in reaching goals or targets. They should have a clear objective and align with your business goals.
Why are they important?
KPIs are necessary to determine if a business is meeting its goals, give accountability, and leverage the health of outsourced relationships based on performance metrics. If we look at BPO ( Business process outsourcing ), KPIs are critical to determining the work's weekly, monthly, and quarterly health of the outsourced work. It creates accountability to ensure. Vendors are meeting and maintaining these values and ensuring the work they are supplying is consistently kept to a high standard.
Setting and Measuring KPI
KPI should be directly related to your business goals. These should be quantifiable measurements to gauge the health of your work. For instance, in some BPO work, your KPI could be based on customer satisfaction rates, turnaround time, quality of action taken, or how effectively and efficiently the team is performing productively.
Type of KPI -
Thomas Moran, Global Outsourcing Senior Programmer Manager, Pinterest
SIG University Certified Supplier Management Professional (CSMP) program graduate Andy Peksa shares what he finds as the most important aspects of a supplier relationship and how they may be able to help you in your role.
Andy Peksa, Senior Buyer-Procurement Ops, T. Rowe Price
SIG University Certified Intelligent Automation Professional (CIAP) program graduate Bob Lutz shares how implementing intelligent process automatation can be beneficial to your business
SIG University Certified Sourcing Professional (CSP) program graduate Sergio Mielnik shares an in-depth understanding of how supplier relationships should be managed and how improving supplier relations at different levels will create successful sourcing engagements.
Throughout the certification, a constant emphasis on supplier relationships and the guidance provided to use these relationships as drivers to successful sourcing engagements. Suppliers are critical drivers of your pricing, delivery, strategy, and forecast. I have engaged suppliers from sole-source, directed, competitive, non-competitive, and management sources. Each situation has been unique, but I have treated all suppliers with the same level of communication and collaboration.
As supply chains get tighter and more competitive, it is essential to keep those communication channels to create a personal approach rather than a solely monetary exchange approach. This does not mean you hand out the keys to your supplier, but if this could happen, you can trust the relationship developed to obtain solutions and drive success.
Managing suppliers at different levels, whether critical or non-critical, is another topic that I found interesting. The relationship between a “ma and pa” shop versus a top-tier conglomerate is not the same. Still, you must strive to find that personal connection with different types of companies, provide fairness in your approach, and understand each supplier’s competitive advantages. I have often found myself waiting in line with top suppliers, which affects our delivery and production schedules.
Sergio Mielnik, Lead Business Risk and Controls Advisor, USAA
SIG University Certified Supplier Management Professional (CSMP) program graduate Cathy Rutherford describes how curcial Governance is in a procurement organization and how it can transform your team for the better.
Cathy Rutherford, Director of Procurement, CoStar Group Inc.
SIG University Certified Supplier Management Professional (CSMP) program graduate Damilare Adeoye discusses why having a strong relationship with suppliers makes for more compatible businesses.
Successful supplier identification, qualification, and onboarding require a stringent supplier relationship check. This is important because it drives a long-term relationship with the supplier and the client, not based on cost, price reduction, or specification alignment.
This lesson, to me, is the art of any successful supplier relationship.
However, many procurement professionals and their organizations need to gain these skills. No wonder the relationship with the supplier is shabby, and most times, a one-way approach where the client is always looking for ways to save money and still get quality materials, and the supplier is always looking for ways to increase the price. "Any relationship that is not built on compatibility is a relationship that is heading for a crash."
In this essay, I introduce you to "what" a supplier relationship fit is and "how" to successfully develop a supplier relationship compatibility/fit, implementation, and management.
Definition:
Supplier: An organization that provides raw materials, products, or services.
Compatibility: the state in which two things can exist or occur together without problems or conflict.
Supplier Compatibility is when an organization that provides raw materials, products, or services shares similar strategic approaches, goals, and objectives.
SIG University Certified Supplier Management Professional (CSMP) program graduate Grzegorz A. Pioruński shares a different perspective on how to implement modern governance into a supplier-vendor relationship.
Some years ago, I heard someone who had not been exposed to significant processes and had no chance to consider all industry connections of a business event say: “Why must present-day everything be a project? This is just a task to do.” These words are the opposite of how I see modern governance in business and risk management.
If you take a closer look, anything we do is a kind of project, smaller or larger, but on nearly every occasion, we plan action, steps, workflow, risk, and expected outcome. Whether or not we are aware of this, this is a fact. Even such a simple task as going to a store to purchase a loaf of bread can be described as a project.
We do plan when to go (the store must be open), what to wear outdoors (depending on weather conditions), we do plan to have some money in our pocket (enough to pay, and not too much “just in case”), we do try crossing roads safely, we do expect to return home with the said bread. The deeper you consider it, the more details and sub-tasks you can recognize. Sometimes you do this on your own; on other occasions, you may like involving other stakeholders, whomever it may mean.
The same strategy we shall apply in business. The more critical the process or, the more significant business it is, the more risky your operation may be, and the more carefully you should prepare, perform and govern the project.
Grzegorz A. Pioruński, Vice President Financial Services, BNY Mellon
One of the significant advantages of the Sourcing Industry Group (SIG) is that members have unparalleled access to industry insights and expertise through our vast and diverse community of practitioners and thought leaders.
Recently we conducted interviews with two senior procurement executives regarding their innovatively practical approach to dealing with inflation and its impact on supply chains.
In the first instance, we talked with Tony Abate - Senior Vice President & Global Chief Procurement Officer at Cigna Express Scripts.
When Cigna closed its $67 billion acquisition of Express Scripts in December 2018 to become what the media called a “$140 billion revenue healthcare colossus,” Tony’s responsibilities expanded considerably.
Responsible for “transforming and integrating two procurement departments into a global, world-class international team, he is accountable for the CIGNA taxonomy research, analysis, and development, including identifying 8000 suppliers with an annual spend of $4.5 billion.
Our second executive is Michael Koontz. Michael is the VP Strategic Sourcing & Business Leader for ATD Sourcing Solutions, whose unique approach to battling inflation we will discuss in a follow-up post.
Creeping Into Supply Chains
Shortly before his interview with SIG, Tony gave a speech to 1500 employees at Cigna on inflation and its impact on supply chains.
So how do you get from tactical procurement metrics to more powerful spend/supply measures that help build new capabilities and favorably impact critical business outcomes?
We have mentioned some of the more expansive sets of metrics that organizations use to measure several areas:
● Spend/cost management and savings
● Supplier/supply performance
● S2P process metrics for process performance
● Underlying capabilities in talent management, digital, etc.
● Stakeholder-specific metrics related to the above
In this third installment, we’ll dive a little deeper into some example metrics, but the first order of business is to provide a framework giving the backdrop on the KPIs and use it to hone in on metric types before listing individual KPIs.
Pierre Mitchell, Chief Research Officer, Spend Matters
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Understanding Supplier Management
SIG University Certified Supplier Management Professional (CSMP) program graduate Kaila Flynn shares how to maintain supplier management from a sales perspective and provides a great reminder of how important relationships and the aspects that make relationships successful are in business