Streamline your approach to supplier relationships
Ten top tips for efficient and effective supply chain management
Best practice for dealing with your supply network
Sam Shakespeare
Product Manager Commercial
In this Insight article, Sam Shakespeare, Product Manager at Commercial, gives his top 10 tips to establishing an efficient and effective method of managing your supply chain.
When it comes to implementing the best possible practices for the management of your entire supply chain, Commercial have the necessary expertise and practical experience to help businesses of all shapes and sizes. We have relationships with 950 suppliers across our 12 areas of expertise. Our level of reliance on these suppliers ranges from small contracts related to very targeted and specific clients, to huge contracts which we rely upon to fulfil the needs of multiple large clients. In recent years, we have developed strategic plans to foster and manage a supply chain that will support carbon net zero and the reduction of Scope 3 emissions.
Through our over thirty years of experience managing an ever-growing supply chain, we have garnered a wealth of knowledge in terms of best practice and fostering and maintaining effective relationships. From auditing to supplier day events, we have employed a number of strategies to ensure the management of our supply chain is as comprehensive as possible and targeted towards meeting all of our goals for people, planet and profit. With this in mind, let’s take a look at our top 10 tips for supply chain management.
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1. Involve and educate your people on the bigger picture
When building your strategy, it’s important to remember that your supply chain impacts your entire company. You have to involve everyone across the business, listen to their ideas and make sure you educate every member of your team on your strategy. It’s also crucial to be receptive to feedback and reports on your strategy. Doing this will ensure that everybody is on board and working towards the same goals when it comes to managing supplier relationships.
2. Create tangible incentives that promote people and planet, not just profit
Transparency and recognition are key. You must make it clear to your suppliers how to excel within your framework. Those organisations who do put in the extra work to succeed need to be given the space to be recognised for their achievements. This will inspire others to compete as well as giving suppliers a clear pathway to both success and rewards.
3. Leaders who talk the talk and walk the walk
Your approach to supply chain management needs to come from the top down and run all the way through your business. This means board and owner sponsorship alongside small leadership teams throughout the organisation whose focus is driving the agenda forward. The board is responsible for setting the vision and the leadership team need to ensure that progress is consistently being made, clear achievable targets have been set and are communicated across your entire network. Taking a top-down approach will mean that your messaging remains clear and consistent no matter who is taking the lead at any given time.
4. Meticulous preparation for data collection
We all know the importance placed upon data and proper interpretation. But you also need to think about the retrieval process itself, not just the data that is required for proper analysis and improvement. There should only be one version of the truth when it comes to the evaluation of your data, one that needs to be made clear from the outset before any action is taken. It should be black and white so as to avoid any room for error. Making your framework as narrow as possible and easy to interpret but with no room for misinterpretation through your templates is key to successful data collection and analysis.
5. A clear, universal and dynamic scoring system
Design a scoring system that covers all the elements of what makes good supplier performance within your organisation. There is more to cover than you might first think. At Commercial, we have five separate pillars across which we evaluate the performance of our suppliers. The scoring system needs to be easy to understand so that people can easily identify the areas where improvement is needed. Make your system as objective as possible so there is no room for misinterpretation. This will drive a desire to make positive progress among your supplier base.
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6. Clear structure from onboarding through to measurement and management
Have everyone within your supplier network following the same process from best practice through to data collection and interpretation. Make sure that this process, from start to finish, is as transparent as possible and communicated in a way that is easy to comprehend. In addition to this, it’s far easier to manage the good apples rather than bad, so it’s key to select the right suppliers to partner with in the first place. A clear structure and universal process will mean easier, more streamlined transition periods for new suppliers.
7. Clarity on the forms of outside validation valued within your framework
There are a wealth of third-party reward and recognition schemes available. Be clear on which you value as a company to give your suppliers a clear direction and goals to achieve. If you don’t fully understand an accreditation or auditing process, you shouldn’t be factoring it into your supply chain management. Being transparent on the outside validation you value will inspire your suppliers to work towards the same targets.
8. Targeting Scope 3
Scope 3 emissions often count for up to 90% of a company’s total greenhouse gas emissions. You won’t be able to calculate and reduce your own Scope 3 without the support of your entire supplier network, so they need to be on board with reducing their emissions too. It’s vital to ensure awareness of the need for co-operation across your supply chain. This will make your progress towards reducing Scope 3 emissions much swifter.
9. Set visible expectations through tiering and benchmarking
Your supply chain and their efforts need to be marked through a clearly benchmarked system. It’s common to deal with hundreds of suppliers so you need to have a dynamic method of management, capable of catering to all of your partners. Ensure the most effort is spent on suppliers who have the biggest impact on your organisation. Focusing on making these expectations clear will improve everything from performance to impact on people, planet and profit.
10. Salient risk reporting and actions
It’s important to understand the potential risks across your product and service portfolio. Start with your top selling items and work to forensically look at your whole supply chain. Consider looking at well recognised third-party frameworks for guidance. Being comprehensive in both reporting risks and taking action to mitigate them will foster a culture of reliability across your network.
Now you know where to start…
Of course, the above top 10 isn’t an exhaustive list and there are many other courses of action that you can and should take in order to make sure your approach to supply chain management is as effective and efficient as possible. With Scope 3 emissions being such a hot topic, you need to be evaluating your entire supply chain and looking for any and all potential areas of improvement. Going through and ensuring you have addressed each of our top 10 tips is a surefire starting point to streamlining your processes and refining your approach to supply chain management.
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