The Voice of the Supplier Survey: Considering the Suppliers’ Perspective
Table of Contents
Considering the suppliers’ perspective
The Procurement and Supply Chain industries have gone through many changes in the last couple of years, due to both external and internal factors, such as the COVID-19 pandemic, supply chain disruptions, adoption of technological advancements, and so on – all in the hopes of making the functions more strategic, efficient and effective.
However, when making these decisions the suppliers’ perspective is rarely considered, although they are often primary stakeholders of these decisions. For example, suppliers of many organizations must login to multiple systems to manage different types of processes and data. Managing many account sign-ons, coping with a variety of different user experiences, and trying to piece together the required actions (and the correct order), results in increased cost and frustration for the supplier.
Simply put, organizations must change the way they work with their suppliers. According to Dr. Elouise Epstein, Partner at Kearney, “Traditional technology is wholly inadequate to support the digital evolution. There is a mountain, an overwhelming amount of evidence, to say that the way we’ve done it in the past doesn’t work. It’s abundantly clear that we have to do something different.”
These friction points have been driving the trend for Supplier Experience Management (SXM), which should eliminate them and bring various benefits to both suppliers and the buying organizations.
As a result, at the start of 2022 we conducted a ‘Voice of the Supplier’ survey in which we asked over 500 suppliers who serve enterprise customers in the CPG, FMCG, Aerospace and Defense and Energy sectors about their experience serving some of the biggest organizations in the world. In each case, suppliers were asked to focus on one of their key customers and all respondents were individuals that work directly with that customer.
This article will go over the highlights of the Survey and cover:
- What makes or breaks the supplier experience
- Addressing the suppliers’ perspective
- The benefits of addressing the suppliers’ perspective
What makes or breaks the supplier experience
When we asked suppliers if they believe they are being set up for the most successful outcomes, 61% of respondents said, ‘We find it challenging to do our best work for this customer.’
Suppliers have advised that in order for their experience to be improved, two areas need to be tackled:
- Experiences directly related to the use of technology and systems
- Overall account management
- Ease of finding information
- Sending back required information or completing customer initiated tasks
- Raising and resolving enquiries
- Experiences relating to supplier performance management and the working relationship
Technology and systems
1. Account management
These responses indicate that it is challenging and difficult for suppliers to manage individuals’ accounts associated with various systems, while also creating multiple points of entry for data. Additionally, it is hard for suppliers to take ownership of their data due to lack of visibility across systems, duplication and resulting inconsistencies.
2. Ease of finding information
25% of respondents said having consistent communications from all departments was one of the top three factors that most enables a good working relationship. However, according to Dr Epstein, many organizations “lack a cohesive, integrated, and up-to-date place for useful information.” As a result, suppliers find it difficult to locate information that is relevant to them.
3. Sending back information and completing tasks or initiatives
The amount of information suppliers are required to provide to their customers, alongside the purchased goods and services has increased to now include various certificates, documents, or responses to surveys on sustainability, diversity, child labor, conflict minerals, circular economy, working conditions, modern slavery, cybersecurity and many more.
Suppliers are feeling this burden, as 60% of them said they spend too much time on administrative tasks for their most important customers.
4. Resolving enquiries
Similar to consumers, suppliers often select a range of different channels to contact organizations. However, all too often, these channels are managed in isolation, and this can create communication difficulties.
Almost half (47%) of respondents said that they find it difficult to resolve queries with their most important customers.
On the other hand, in our recent Supplier Experience Survey, which was answered by 100 senior procurement professionals from organizations with $1 billion turnover or more and which looks at the issues from the enterprise customer perspective, 67% acknowledged that time to resolve enquiries was an area that they needed to improve. However, it was one of the top three priorities in only 1% of cases.
Performance management and working relationship
Amongst the top three factors that most enable a good working relationship, according to suppliers, are:
- Improving service and support (30%)
- Having reasonable expectations (30%)
- Sharing performance data (27%)
However, there is a disconnect with the last point, as 74% also said, “The review performance metrics used are more helpful to the customer than to us,” revealing lost opportunities.
Addressing the suppliers’ perspective
According to Anthony Payne, CMO at HICX, by removing friction for all suppliers, including the smallest and least strategic, you’ll have greater control and visibility through massively improved data and you’ll position yourself to be customer-of-choice for the largest possible number of your suppliers.”
When we asked the suppliers ‘What would be the one thing that would most improve the relationship between yourselves and your most important customers’, the results revealed:
Adjusting the experience based on supplier characteristics is a new concept, increasingly adopted by leading organizations. It only makes sense, as for example, large suppliers with hundreds of customers and automated processes won’t have the same capabilities or resources as small businesses with a few customers and manual processes.
As Anthony Payne concludes, “If you combine this with intelligent self-service so that the supplier can express their own preferences – just like I can choose the language on the website of a multi-national brand – you can deliver what feels to the supplier like a one-to-one experience, just for them, and that removes friction.
The benefits of addressing the suppliers’ perspective
Considering the suppliers’ perspective will ultimately bring various benefits to the buying organization, such as lower prices and better service, better quality of data, lower levels of risk, and others.
The survey indicated that 68% of suppliers consider their largest or most important customer to also be a ‘customer-of-choice’, which is also likely to bring benefits.
For example, although 50% of respondents said that they would prioritize orders for their most important customer if they were low on stock or resource, even though the customer is not customer-of-choice, the figure rises to 70% of those for whom the customer is the customer-of-choice.
It’s time for change
The results of the survey clearly show there is a disconnect between what supplier want and need, and what buying organizations think they want and need. It also revealed becoming a customer-of-choice yields various benefits.
It is therefore worth ending on this question for consideration: “If there is another crisis, if suppliers have a limited amount of stock, who do you think they will be giving their supplies to?” This question needs to drive the thinking behind the future direction of how enterprises interact with all suppliers.
