Supplier Relationship Management Trends in 2018

Risk management and compliance with payment times may still be the number one priority for procurement departments, however, a survey carried out by AgileBuyer* reveals a trend that is gaining traction in supplier relationship management: “pampering”.

The main concern: risk management

75% of respondents claimed that they had targets this year in terms of managing supplier risks (whether logistics, quality, operational, financial or CSR).

This figure has remained stable compared to previous years, but there is a stark contrast between the public and private sectors. Only 61% of public services have defined objectives to address risks with their suppliers vs. 76% of private companies.

The strategic importance of the topic depends on the sector. For example, engineering (84%) and healthcare (80%) are fairly advanced in this particular area, unlike the hospitality and catering industry (64%) and the B2B sector (57%).

One reason for this significant difference is that some lines of business are more focused on risk management and subject to different regulations.

Payment times are still in the line of fire

Managing and complying with supplier payment times are objectives for 69% of procurement departments. To be more precise, it is “always” the case (for 45%) and “often” (for 24%).

This year’s figure is a record-breaker, which proves that buyers are feeling a greater sense of responsibility towards such cross-functional issues.

Pascal Pelon, CPO at Axa France, explains: “At AXA France, the procurement department is now responsible for monitoring payment times, since one of the keys to success is a sound understanding of the suppliers and effective control over the interactions between suppliers and clients.”

Supplier relations: heading towards a real partnership?

59% of respondents have taken measures to improve the quality of their supplier relationships, especially by selling their needs to their suppliers and giving them greater incentive to work together.

Olivier Joseph, Senior Procurement Engagement Manager at Microsoft, confirms the trend: “We set up a Microsoft Supplier Program (MSP) several years ago with the aim of reinforcing and prioritising the partnership with certain suppliers.”

Companies have actually realised that it is in their best interest to become the “favourite customer,” and their suppliers’ priority. In addition to giving a greater insight into orders with suppliers, the idea is to grow together using such processes as collaborative innovation and co-investment.

* The survey was carried out by AgileBuyer – an operational procurement consultancy, in partnership with the CNA (French National Procurement Council).