Experience is key
Supplier experience management (SXM), which considers suppliers as partners and enables mutual growth, is gaining precedence.
With the growing realization about the critical role that suppliers play in ensuring resilient supply chains and customer experience, the need for better retailer-supplier collaboration is now being widely acknowledged.
Unlike traditional supplier relationship management (SRM) that is largely one-sided and focuses on retailer’s growth targets, SXM is more empathetic and aims to build a frictionless business experience (BX) for suppliers and is the way forward in supply chain management.
Why the buzz around SXM
Reeling under the impact of COVID-19, retailers began to acknowledge the role of suppliers in driving their strategic growth.
Many retailers lost revenue due to supply shortages and it was widely recognized that enhanced supplier collaboration is key to unlocking true value.
SXM levels the playing field for retailers and suppliers. Instead of a singular emphasis on implementing processes to mitigate risks, save costs, ensure regular supply, and assess supplier performance and compliance, SXM empowers suppliers to achieve mutual growth targets. This paves the way for improved collaboration, a key factor in achieving resilient supply chains. SXM refers to all the dimensions and touchpoints of retailer interaction with suppliers. In addition to measuring performance and setting up targets for suppliers, it requires the retailers to identify issues, opportunities, and improvements across supplier touchpoints, enabling the supplier to deliver desired outcomes. When a supplier’s wants and needs are recognized, the retailer can unlock new collaboration models, reimagine the supply strategy, and mitigate supply risks with ease.
The first step to eliminating friction is to identify it
The key to achieving success in SXM is to eliminate friction from every aspect of supplier interaction and provide a seamless, integrated business experience across critical SXM dimensions.
Friction refers to anything that is a deviation from the optimal way of doing business with suppliers impacting critical KPIs such as inconsistent and inefficient processes leading to higher turnaround time, lower productivity, and poor data quality. Other examples include:
Having to interact with multiple systems and teams
Legacy ways of working such as manual processes, spreadsheets, and emails
Lack of a formal communication framework and channels, causing delays in addressing supplier queries and complaints
Lack of clarity, transparency, and visibility into retailers’ internal processes
Improper monitoring of commercial deals leading to billing errors
Inconsistent and inefficient legacy processes
Lack of feedback and a virtuous loop of positive interaction
Principles of frictionless SXM
Removing friction from SXM dimensions and touchpoints might seem straightforward, but it requires well-thought-out actions.
The following principles serve as guidelines for achieving optimal results:
Supplier enablement: Enable suppliers to discharge their responsibilities efficiently and independently. Provide the support required such as trainings, demo, and support documents.
Supplier empowerment: Listen to the voice of suppliers and understand how you can help them. Let them know they are heard and communicate the changes made. Provide them with the necessary tools, optimize processes, and institute a channel for seamless interaction and collaboration.
Mutuality: Progress towards collaborative growth and a long-term relationship that is mutually beneficial and based on sharing value.
Transparency: Provide visibility into internal processes and policies and be transparent in addressing the concerns of suppliers.
Digital readiness: Enable solutions leveraging digital levers to facilitate supplier engagement and collaboration.
Data-driven: Use real-time and predictive insights to track and deliver business outcomes. Gather data on process inefficiencies, errors, and deviations and harness them for enabling a culture of continuous improvement.
Minimal manual intervention: Automate repeatable, transactional, and mundane activities to free up time for strategic activities.