Supplier Relationship Management A Growing Requirement

Almost eight in 10 of firms say managing supply chain risk is a growing requirement for them.

A survey conducted by Greenstone found 72% of companies were collecting non-financial information from suppliers, though 43% only collected data as part of a tender process.

In a report Greenstone said: “Therefore these organisations are not conducting ongoing supplier due diligence and cannot be sure that suppliers remain compliant throughout the period in which they deliver services.”

However, a similar proportion of organisations do keep regular track of suppliers, with 17% of respondents sending out questionnaires by email and just over a fifth using an online supplier management tool.

The biggest driver for collecting information was regulation and legislation (43%), closely followed by reputation (32%), and the areas most covered were environment, health and safety and commercial information. Just over 60% of firms asked for information about modern slavery.

“What the study also shows is that a wide range of information is being requested,” said the report. “As a result, increasingly diverse areas of both the buyer and supplier organisations are required to engage in the process and have access to the data.”

The report added: “When asked what factors were important in shaping the structure and focus of organisations’ supplier engagement programmes, risk reduction, corporate sustainability, reputational risk and regulation were all sighted as significant motivating forces.”

The global survey, of 1,000 senior decision-makers at mid to large organisations, showed that more than eight in 10 organisations said procurement was the function that managed the entire process from contacting suppliers to data analysis.

“This is most likely due to the fact that procurement ‘own’ the relationships with the suppliers, have a clear idea of contract status and the commercial scale of the contracts and can therefore identify which suppliers meet the buyers defined risk and compliance criteria,” said the report.

The level of resources allocated to supplier programmes “varied significantly”, with 40% saying managing the process was a part-time responsibility of a full-time employee and 38% saying multiple people had a full-time responsibility.

The report said of those organisations that had not yet automated processes, 61% were considering adopting an online solution to gather and analyse supplier information.