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Book Review: Supplier Relationship Management in the Supply Chain
Supplier Relationship Management in the Supply Chain by Stuart Emmett is accurately titled – it is in fact a book about the importance and execution of supplier relationship in the supply chain. But because so many organizations do not have SRM programs (or would benefit from being more supplier-centric) it is more importantly a book about change. In order to get different results, we must think and act differently. This is a simple enough idea, but bringing about such changes in an organization is complex enough that few of us have reached our desired level of SRM maturity.
The author, Stuart Emmett, is a student of change himself. He has an international background in Marketing, Operations, Training, Logistics and Supply Chain. In 1998 he founded Learn & Change Limited to develop management and supply chain excellence as his own boss. He has written 29 books on a number of topics including procurement, leadership, supply chain, motivation, communication, and customer service.
Emmet defines SRM before the book begins as:
“A holistic discipline to work collaboratively, with those suppliers who are vital to our success, by maximising the value of our relationship where such a vision for me, must also be viability for you.” (i)
The need to bring spend under management is a key performance metric for many procurement organizations, and Emmett takes this idea to the next step, looking at what is required to bring our suppliers under management as well. In order to succeed, however, our management of suppliers must ensure their success as well as our own. In order to make that dynamic a reality, trust is a necessity.
While an emphasis on trust may seem too ‘soft’ for many procurement organizations, Emmett provides several very good examples of where trust is not only employed but relied upon, including investor/analyst trust in the management team to manage stock value, customer trust for a brand’s reputation, and the trust an employee places in an employer to reward them for discretionary effort. (p. 25)
The trust that is to be established with suppliers is best leveraged in its ability to generate value for customers. “A supply chain view of added value would also recognise that it is only the movement to the customer that is adding (the ultimate) value. (p. 42). When considered in an interconnected chain, all categories of spend – both direct and indirect – have the opportunity to create value. Making time in a sourcing project to understand that opportunity should drive the strategy for each category of spend.
The change required to apply a collaborative, trust-based, value-driven philosophy from procurement into the rest of the organization requires people to address beliefs they may not realize drive their thinking. As Emmett says near the conclusion of the book, “Making changes may not be easy, especially when it requires changing something that has worked well in the past, but the main difficulty is with changing embedded thinking.” (p. 58)
In Supplier Relationship Management in the Supply Chain, Emmett quickly and succinctly addresses both the potential and the realities of bringing about meaningful change. His point a driven home and made memorable through a number of case studies on collaboration including Heathrow’s Terminal 5 project, the Royal Mint and offshore engineering and CRINE.