Building Buy-In for Supply Base Management
One of the biggest hurdles in implementing an automated Supply Base Management (SBM) program is getting the buy-in.
Wednesday, July 3, 2019
One of the biggest hurdles in implementing an automated Supply Base Management (SBM) program is getting the buy-in. Getting buy-in from stakeholders and decision makers is absolutely necessary to implement a Supply Base Management program. At Scanmarket, we have helped many organizations successfully navigate this internal journey in their own companies and learned that the most important steps gaining buy-in for SBM are the following:
Have a clear story.
Make sure you can clearly articulate what SBM is and why it matters. Automated SBM is likely a new topic for many of the stakeholders. Supply Base Management (SBM) provides a single, comprehensive solution for your supplier relationships. SBM makes managing your supplier relationships easier. Whether it’s risk management, savings, 360-degree scoring/monitoring, or efficiency, you can:
- Improve collaboration internally and externally.
- Lower annual management costs per supplier.
- Better respond to supply incidents.
- Onboard suppliers faster.
- Execute more efficient sourcing.
Focus on the benefits to your stakeholders.
When communicating your story to stakeholders, use examples that will resonate with them. Pick the area of focus that matters most to them. For instance, focus on ROI with finance. Here are some benefits you can use:
- Automation: There’s simply no way to manage thousands of suppliers in Excel and shared-drives. You need a tool in place to automate as much of the process as possible. Failure to do so means your team will be spending their time looking for information and updating records, rather than looking for risks and opportunities.
- Efficiencies: Let your suppliers maintain their own information from self-registration to company details to contact information.
- Compliance: Ensure up-to-date supplier certificates, agreements with your policies, regulatory filings, etc. You control what’s required and the system provides the notifications and alerts.
- 360 Degree overview and Reporting: Easy and automated reporting including supplier scoring and traffic light overview dashboard provides a full and complete view to your supply base and highlights areas of potential issues for further investigation. This lets your team focus on what’s important rather than spending time generating reports.
- Easier collaboration among team members: With all your supplier data gathered in one repository under a standardized format, there’s less chance that data will be lost in email inboxes or hard drives.
- Connection (and API) between tools: Connection to eSourcing tools leads to a faster eRFx process as data automatically transfers and suppliers are easily shortlisted based on their pre-existing profiles.
A comprehensive SBM can help you reduce supplier management costs by up to 85% - mainly by automating a lot of the administrative tasks. Instantly available up-to-date data makes it easier to understand the complete picture of supplier performance, risks, activities, etc. thereby eliminating wasted time in decision-making processes – essentially allowing the optimal decisions to be made faster. These tools help you manage everything from supplier contact data, certificates, notes, communications to customizable questionnaires, KPIs and Risk scorecards. Questionnaires can be linked with sourcing events to save you and your suppliers’ time, maintaining up to date records and avoiding duplication of work. Learn more about Scanmarket's Supply Base Management tool in the video here:
Example: Building Buy-in
Focus on how SBM could help them in the event of a supply risk emergency to:
- Know – Quickly determine which inputs and/or suppliers might be affected during such times as natural disasters or the Coronavirus. In the old days, this meant hunting through emails, spreadsheets and databases that were outdated the day after they were created. By using a supply management system, you can quickly determine which suppliers are at risk (e.g. suppliers located on the Gulf Coast during tropical storm Gordon) and take appropriate action.
- Communicate – Once you’ve identified a segment of suppliers, the supply management system allows you to communicate with that segment in an organized manner and maintain all the communications in one place. You will also be able to solicit structured information such a templated RFI's or questionnaires.
- Find – If you’ve had a major input or supplier impacted by a “force majeure” event, you’re going to need another source quickly. And keep in mind that your competitors will also likely be looking for the same thing. In other words, moving quickly will be key to success. Starting up a supplier discovery and qualification effort after the fact is not going to work. Instead, you’ll want to have access to a pre-qualified set of suppliers who can quickly fill the void.
- Maintain – The key advantage of supply management platforms is, that maintenance of the data becomes the responsibility of the supplier, not your team. In addition to requiring less effort by your team, having the supplier “own” this data means there’s a much better chance of it being up to date and accurate. Even better, there are now multiple options to create system-to-system connections through web-service APIs to further reduce the effort required.
Repeat it endlessly.
Take your story everywhere in the organization, from the C-suite to the fulfillment department. Make no mistake, getting buy-in for SBM is a sales project and selling takes time and effort. While there’s a chance you might never need it in an emergency, SBM and proper risk management practices should be considered in the same vein as insurance - you hope to never use it but wouldn’t dream of living without it.
No matter what, think about risk now before it’s upon you.