Supplier Relationship Management (SRM) Research 2016-2017 - Solution Analysis and Business Insights
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Supplier Relationship Management (SRM) Research 2016-2017 Solution Analysis and Business Insights
Prepared and edited by: Bauke Vogelzang Kuipers Robin Adriaans Ton van Dolder Leon Fleuren Erick Haag Arjan de Kok Jeffrey de Visser Tim Wijnsma Silke Penterman Sarissa Alleijn A note of thanks…. Capgemini Consulting would like to extend its thanks to the vendors who made time to participate in the Supplier Relationship Management Survey. Without their cooperation and support, research of this nature would not have been possible.
Contents Foreword 05 Business Insights 07 Functionality Analysis 21 Vendor Profiles 52
04
Supplier Relationship Management (SRM) Research 2016-2017
Foreword
Since our last Supplier Relationship Management (SRM) survey, the market for SRM applications has changed with the most important trends
being the strong push towards the cloud and greatly increased usability with mobile applications. It is interesting to see that since the first study,
which we did more than 14 years ago, the market for SRM is still growing and improving. We hope this study can again help you, as a procurement
professional, to maneuver the SRM applications landscape just like the first study did.
In the first section our procurement professionals share with you three focus areas for development in the SRM environment. The first addresses the
Future Value Chain and how global developments in Supply Chain Management impact SRM. The second addresses the role of SRM in creating
competitive advantage and the third addresses new digital technologies in SRM for collaboration.
The second part of the study analyses the results of the SRM functionality survey. The analysis is based on a series of questions related to our
procurement process model and designed to assess whether the software covers a specific set of functions within the SRM environment. In line with
our previous editions, we want to ensure that the survey evaluates the market to a level of depth and completion, required to present the relative
strengths/weaknesses of the vendor landscape accurately.
In addition to the previous SRM surveys, we assess the level of support in Supplier Data Management and Product Lifecycle Management. We
see an increasing need for Procurement to be involved in product design, and be the linking pin for early supplier involvement and collaboration
to maximize value from the supply chain. To tackle this new role, procurement professionals need new functionalities to support them in their
collaboration with suppliers. These functionalities are currently delivered primarily by Procurement Lifecycle Management (PLM) vendors, but we see
an increasing number of SRM providers expanding the scope of their solutions towards these collaboration focused functionalities.
The last part of our research consists of the Supplier Profiles in which we have given our independent view on the different vendors. We have learnt
from previous client engagements that this is valuable information for SRM software selection initiatives.
Our procurement experts have worked on this study with great pleasure. We hope you find the study useful to further develop your supply
management function and look forward to your input and commentary. We certainly hope to hear those comments through one of our many digital
mediums such as the Capgemini Procurement Transformation Blog.
Ton van Dolder
Supply Chain Management practice lead the Netherlands
Capgemini Consulting
Erick Haag
Procurement Transformation lead the Netherlands
Capgemini Consulting
05
06
Supplier Relationship Management (SRM) Research 2016-2017
Business Insights
07
The Future Supply Chain and the role of Procurement
The new economic reality Digital world - accelerated Persistent threat of insecurity
digitization and technological due to political instability, global
requires procurement
adoption enable superior security threats, financial crisis and
to shift focus towards collaboration and communication environmental considerations can
supply chain value and risk across the supply chain resulting cause sudden constraints in the
management in improved reliability, agility and supply chain.
effectiveness
The supply chain in all industries is
Leading organizations are re-thinking
rapidly changing due to globalization Differentiated customer experience
the role of procurement and Supply
and other economic, social and - customization and personalization
Chain Management in order to
technological developments. In the of products/services require to
transform traditional supply chains
cartoon below we have pictured our leverage the innovative power of the
into flexible, agile and resilient digital
vision on the capabilities that are supply chain
supply chains. They change their
required for organizations to cope with
Fight for resources - scarcity of approach from cost management to
the challenges of the future supply
natural resources and volatile supply value creation. Supplier Relationship
chain.
markets put pressure on the agility Management and maintaining supplier
of the supply chain and requires networks are critical factors in this
Four mega trends are driving these
innovative risk mitigation strategies transformation.
changes and the role of suppliers in
global supply chain management:
08
Supplier Relationship Management (SRM) Research 2016-2017
How do these trends influence the network and safeguard its agility. The Similar to the customer journey,
relationships with suppliers? And what procurement function needs to have procurement needs to identify the
are the implications for procurement? the ability to ‘consume’ and leverage ‘moments of truth’ for strategic
available data, e.g. to scout for suppliers in operational, tactical and
application of new technologies and strategic collaboration. This will bring
Digital world support the business to assess the focus to the right improvement areas for
Technology is the biggest influencer possibilities and/or impact. becoming a partner of choice.
of today’s business and impacts
every facet of the end-to-end supply
Differentiated customer Fight for natural resources
chain. Cloud technologies, mobile
experience
applications, social media, and big World’s natural resources are under
data are buzz words that represent Today’s customers are well-informed severe pressure by global population
applications of digital technologies and more demanding. At the same growth, fast-growing emerging
that can be disruptive as well as a time disruptive start-ups can rapidly economies, and other demographic
key differentiator for the supply chain. build new products and services by pressures. Consequently, food and
Machine to machine communication using free digital tools and shake up the energy prices are rising and demand
supported by integrated sensors has market. An example of such a disruptive for fresh water has been steadily
accelerated production and logistical start-up is the dutch company Blendle. increasing. Some countries are buying
processes. Extensive information - Blendle provides a online news platform mining rights for rare earth elements
accessible via digital (cloud) platforms where users can search and read in cases where resources are found in
and social media - has increased articles from a variety of newspapers limited number of countries, which can
transparency of the complete value and pay per article. Many customers restrict supplies at will.
chain. It enables improved decision cancelled their subscription(s) to
making resulting in improved reliability, newspapers and switched to Blendle. It Typical for today’s challenge is the
agility and effectiveness. also attracted new customer groups to volatile market fluctuation of these
pay for news articles. natural resources as well as their
Other technologies that are changing derivatives. The role of procurement
the supply chains drastically are drones Companies recognize the pressure to is to understand the drivers that
and 3D printing. Companies are not only customize and personalize products instantly can change the demand for
experimenting with last-mile delivery by and services. To be innovative natural resources. They not only need
drones, but also with applications for and deliver distinctive customer to understand the quota of natural
safety inspections, network connections experience a company should have resources in the purchased products
or agricultural purposes. 3D printing the digital capabilities to interact with but also have market intelligence on
helps to eliminate the stock of spare their customers through a variety of neighboring supply chains that use a
parts leading to reduced costs, risks channels. They need to understand common supply base.
and improved cash flow. It can also be the customer journey and continuously
used for rapid prototyping or reverse live up to customer expectations
engineering reducing development and promises. From a supply chain
costs and increasing time-to-market. perspective, this requires operational
excellence and optimal collaboration
With the rise of the digital world, with the supplier network. To realize
companies are becoming more the maximum added value from the
and more dependent on their supply chain, companies want to
suppliers. Supplier collaboration and become the customer of choice for
communication is becoming a key their most important suppliers. Without
challenge for the procurement function. the cooperation of the publishers and
This requires the ability of procurement journalists Blendle cannot deliver any
to develop and manage the supplier content to its users.
09
Leading organizations use the following A second strategy to bring agility to Omni-Channel Fulfillment - deliver
procurement strategies to mitigate the the supply chain is to introduce local goods quick and efficient to end
risk of insufficient supply: supplier innovations to the localized customers through all available
product strategy. Especially in emerging distribution channels
Build up global know-how on
markets the usage of local suppliers
alternative sources for materials at E2E Visibility - understand and
increases cost effectiveness of the
times of uncertainties control the end-to-end supply chain
supply chain.
across company boundaries
Develop alternative product
strategies in line with persistent Supply Chain Analytics - toolbox
supply insecurities, to offset loss of Looking forward of available (big) data sources and
business traction in such markets digital analytics to support the other
The developments in global markets
five areas.
Applying circular economy require supply chains to become
principles, e.g. sourcing secondary flexible, agile, resilient and digital.
More than ever before, companies
raw materials and using renewable
need to rely on strong relationship
primary materials Capgemini Consulting helps
skills of Procurement to strengthen
organizations with this transformation
Investing in and developing existing alliances and forge new ones.
by providing six core capabilities for the
new capabilities with strategic The Procurement function is starting
future supply chain:
partners (e.g. early market/supplier to tap into the rich sources of social
engagement) Supply Chain Strategy and Target media to improve the communication
Operating Model - strategy and to their supplier network. Supplier
Partnering with local suppliers in
operating model adapted to the Relationship Management tools should
the supply chain, providing micro-
requirements of areas such as be better equipped with functionalities
financing to local suppliers that
omni-channel fulfillment and global for analytics and supplier collaboration.
jointly develop local economies and
resilience. For this reason our bi-yearly Supplier
secure supply of goods
Digital Supply Management - Relationship Management research
complete and real-time insight into has been extended with these
A growing number of innovative
the value-added, costs and risks of functionalities.
technological solutions are available
which support the supply chain function suppliers and supply chain partners.
with data analytics and scenario based
Collaborative Planning - demand
simulation techniques.
and supply planning based on
planning and real time production
data of partners in the supply chain
Persistent threat of insecurity
Recent headlines in the news are
covered with examples of political
instability, global security threats, Supply Chain Strategy & Target Operating Model
financial crisis and natural disasters.
All these political and macro-economic
factors pose a persistent threat to the
supply chain, affecting globally spread Digital Supply Collaborative Omni Channel
businesses. Economic sanctions or Management Planning Fulfillment
import restrictions to protect national
resources lead to sudden increase of
costs and lead-times.
E2E Visibility
An advanced risk management process
is key to an agile supply chain. Analytics
must be the balancing factor that takes
the increasing complexity and volume of
Supply Chain Analytics
data and distils it into actionable insight
to secure the supply chain effectively.
10Supplier Relationship Management (SRM) Research 2016-2017
Digital Supply Management
Creating competitive advantage through the supply base
Figure 1 - Capgemini Supply Management Excellence Framework
PROCUREMENT STRATEGY AND GOVERNANCE
Business Analytics & Operational
Integration Layer Insights Layer Excellence Layer
Operational Procurement Excellence based on external
Innovation & Strategy based on inhouse capacity
Service Providers and Solutions
“Front Office” “Middle Office” “Back Office”
and capabilities
SUPPLIER INNOVATION
MANAGEMENT DESIGN FOR EXCELLENCE
TOOLS
COLLABORATIVE COMMODITY BPO / SSC MANAGEMENT
MANAGEMENT
RISK & PERFORMANCE MANAGEMENT
Procurement value Becoming a partner of choice For the procurement function, this
requires a new way of thinking. It
From cost and category management What leading organizations do differently
aims at developing and implementing
to value and relationship management these capabilities and moving beyond
Our research into the role of
contract and transaction management
Centralizing, standardizing, and procurement in innovation1 has revealed
towards true Supplier Relationship
outsourcing transactional procurement that supply chain innovation leaders
Management with strategic partners.
activities is just the beginning of a manage to change their procurement
The key is to find the right supply
more strategic procurement function. It business model and maximize supplier
partners, jointly develop capabilities,
offers procurement organizations time value in innovation processes. Those
control risks and manage performance
and resources to focus on developing ‘early adaptors’ are doing things
to improve products and services
and maintaining relationships with significantly different, especially in four
collaboratively.
strategic partners. But how do they areas:
engage with their suppliers in order Knowing the supply market and
to maximize value? Which suppliers successfully scout for technology Time to change
provide a competitive advantage? capabilities;
Which offer the opportunity to really Most companies are lagging behind on
add value to both the business as well Segmenting the supply base and leaders
as external customers? New digital implement supplier involvement
strategies for each segment; Capgemini’s 2014-2015 Global CPO
technology can play an important role to
survey2 shows that adopting supply
support companies in answering these Adopting value and innovation management excellence is not easy
questions. driven KPIs in addition to cost and to do. Many organizations are still
risk related KPI’s; struggling to master the basics:
Ensuring the company is attractive closed loop procurement through
to its most important sources of spend visibility, sourcing and contract
innovation. compliance. Almost 80% of the
11respondents state that improving Making it work In scouting for innovation capabilities
the quality and availability of spend of suppliers, we use advanced social
The ‘360 Degree Supplier View’
information is a current focus area and network analysis and tooling (Kenedict
70% percent are currently focusing Innovation Analytics) to map the
At Capgemini Consulting, we use a serie
on contract compliance within the entire supply network around specific
of methods and digital technologies to
business. 27% of the respondents technologies and expertise. It gives
support organizations in creating and
realize that there are no controls in place the organization insights of capabilities
maintaining innovative, sustainable and
to monitor compliance. on supplier, technology and inventor
value adding supplier relationships.
level. These market insights are
Continuous insight in supplier
Furthermore, only 16% of the complemented with business and
capabilities and maximizing supplier
respondents have a corporate strategy supplier views. These views are mapped
performance will be procurement’s key
and process in place to manage in ‘supplier journeys’, which identify all
competitive edge in the near future.
supplier relationships. In these touch points and activities with strategic
Our approach is based on in-depth
companies, the Supplier Relationship suppliers.
supplier understanding and derived
Management strategy is different per
from inside-out and outside-in views.
supplier segment and aligned between What requirements do suppliers expect?
It identifies the required capabilities
all business functions involved. At the What capabilities are needed for
and performance of the company to
other end of the spectrum, 30% of the building a mutual beneficial partnership
stand out from competition during
respondents indicate that there is no from the supplier’s perspective? Do
crucial moments of supplier interaction.
process at all for Supplier Relationship I have the necessary processes in
Through leveraging analytics, social
Management and that Supplier place to match supplier expectations?
media, cloud and mobile solutions for
Performance Management is done on a We focus on the interactions which
Supplier Relationship Management,
case-by-case basis. are considered most crucial by the
procurement is able to support the
companies strategic suppliers. All
business to maximize value in the
information will be combined and used
upstream supply chain, whether
in our Supply Innovation Labs.
it is in product innovation, delivery
excellence or product transparency and
sustainability.
Figure 2 - Supply Innovation Labs to determine the roadmap towards Supply Management Excellence
12Supplier Relationship Management (SRM) Research 2016-2017
In these labs, we organize interactive Way Forward companies in developing these insights
sessions with business, procurement and capabilities. It builds on advanced
and innovation leaders to discuss the Summary of the issue and next steps analytics and outside in views to
supply base potential and the role of to take establish a business strategy driven,
procurement as the liaison between the value delivering supply management
In the years to come, maintaining and
business and their strategic suppliers. function. A function with activities and
strengthening strategic relationships
Leveraging the Capgemini ‘Accelerated responsibilities beyond the Procurement
with suppliers will be of crucial
Solutions Environment’ approach, Department to effectively support the
importance to deal with the rapidly
we collaborate with our clients to maximization of business and customer
changing marketplace. The Digital
combine all information into a scalable value.
Supply Management approach of
and client specific transformation
Capgemini Consulting will support
roadmap towards Supply Management
excellence.
References
(1) Penka, A. & Schipper, K: Innovation in Procurement, a new era of innovation in the procurement process, Capgemini, April 2012.
(2) Capgemini Consulting: 2015-2016 Global Chief Procurement Officer Survey
13Buyer-supplier collaboration
Value based SRM powered by Digital Solutions
Driven by the outsourcing of 1. Strengthening supplier
product development capabilities,
bonds – collaboration in
declining margins and increasing
buying professionalism, firms are
product development
now entering collaborative supplier In many industries, waves of increased
relationships rather than transaction- specialization and outsourcing of
based relationships. While the general non-core competencies have been
perspective on supplier engagements witnessed over the past decades. As
shifts from being cost-centered to a result, firms depend more than ever
value-focused, the development of an on the innovative capabilities of their
effective approach towards Supplier supply base. In addition, the continued
Relationship Management (SRM) has success of the entire supply chain
remained high on the CPO agenda, and requires procurement and suppliers
not without reason. Profound SRM can to be involved early on in the product
yield significant benefits, including more design and development stages.The
innovation, shorter time-to-market, rationale behind supplier involvement
greater opportunities for cost reduction, in product development is that the
and better spend control. To capitalize experience of suppliers can be
on these benefits, firms develop new leveraged during product innovation.
approaches for collaboration and Firms can tap into the knowledge of
information sharing with suppliers, their suppliers to avoid design-level
including a range of digital tools. Recent errors, drive idea generation, improve
Capgemini Research1 has identified quality and shorten development time.
four major trends in SRM, supported by
various digital technologies:
Figure 1 - Current trends in SRM
Collaboration in Idea Innovation / Advanced Social Listening
Trends Product Development Crowdsourcing Sourcing Analytics
Collaboration made for development of Tool to gather ideas, innovations, or Mainly focused around spend Social media helps connect the
new product, breakthrough information from suppliers via an analysis, sourcing optimization and information and facilitate decision
Description technologies and improvisation of ideation platform supplier risk assessment making among suppliers
existing products
Leveraging supplier experience Faster generation of ideas Higher spend visibility Lead generation
during innovation
Drivers Access to a larger pool of ideas Supplier performance
Improve communications
and risk assessment
Maximizing operational benefits Stay updated with the latest Identification of new
technological innovation Demand management
vendors, geographies
Companies acknowledge the Sourcing ideas from suppliers Companies are still evaluating
indispensable role of suppliers Social media among suppliers
Adoption is being highly accepted as their investments in analytics;
in new product development; is picking up the momentum
source of innovation across adoption expected to increase
however skepticism still persist slowly
industries in the future
Source: Capgemini Research 2015
14Supplier Relationship Management (SRM) Research 2016-2017
With different levels of development risk
Figure 2 - Supplier involvement matrix
and responsibility held by suppliers,
four levels of supplier involvement can
be distinguished: strategic, critical, High
routine and arm’s length development2.
While strategic and critical development
Degree of development responsibility
projects involve high levels of risk and Arm’s length development Strategic development
hence require strong involvement of
the buyer, arm’s length and routine held by the supplier
development programs require
less intense collaboration and
communication. Firms should ensure
that an appropriate type of engagement
is chosen.
Routine development Critical development
High profile development projects
can benefit from digital tools that
facilitate buyer-supplier collaboration.
Collaboration platforms are offered by Low Development Risk High
a variety of technology firms. Examples Source: Wynstra, F. , Ten Pierick, E.
are SAP, which has launched software
for Integrated Product Development
(IPD) and IBM, which has released
a Product Development Integration
celebrates suppliers who have made a 2. Opening up the
significant innovative contribution. With
Framework (PDIF). These tools aim to business – idea innovation/
this program, Unilever is successfully
enable idea generation and information
sourcing innovations, operational
crowdsourcing
exchange, to monitor development
solutions, and ideas for product Open innovation and crowdsourcing
progress, and to synchronize
development from its supply base. are emerging as platforms for engaging
communications between suppliers,
A notable example of an innovative with suppliers and fostering innovative
procurement and different internal
supplier was Novozymes in 2014, potential. Open innovation is viewed
customers as they work together on
creating an ingenious solution for liquid as making use of not only internally
innovations.
laundering together with Unilever4. In developed, but also externally sourced
2011, Novozymes was also recognized ideas to accelerate innovation.
An example of an organization that
for replacing chemicals with enzymes in Simultaneously, the paradigm holds that
collaborates for innovation is Unilever.
Unilever’s detergent powder and liquid inventions that are not used within the
In 2011, Unilever launched its ‘Partner
formulations5. firm should be continued outside the
to Win’ program3, which is a strategic
firm’s boundaries, e.g. through licensing
plan aimed at building relationships
There are many more examples of or spin-offs. This enables firms to
with selected key suppliers in order
successful new products resulting benefit from a rich landscape of valuable
to achieve mutual growth. Unilever
from a shift in Supplier Relationship knowledge and innovations that were
makes meaningful and long-term
Management. Henkel believes that earlier kept away from the market.
commitments to the partners that
close strategic supplier partnerships are
share Unilever’s sustainable growth
the key to create customer value and Within the realm of open innovation,
ambitions, and aspires to become their
uses a range of new and sustainable crowdsourcing is seen as a useful
customer of choice. It uses an open
raw material applications from mechanism for gathering ideas,
innovation portal, hosted by a third
suppliers in their products. Equipment innovations, and information from a
party, to encourage suppliers to submit
manufacturer Caterpillar partnered with specific population, typically via the
innovative ideas around predefined
a supplier to create a joint R&D facility to internet. While crowdsourcing is often
consumer needs and challenges. The
increase the speed to market of a new used with consumers to identify and
program also incorporates a large
catalytic converter6. respond to ‘market pull’, the approach
event, the Partner to Win Awards, that
is increasingly used with suppliers
15in order to develop and ‘push’ new Ultimately, “Get on the Shelf” enables spend analysis, sourcing optimization and
products to the market. There are Wal-Mart to successfully leverage supply risk assessment. Organizations
numerous benefits to this approach, supplier experience and bring innovative that apply spend analytics typically spend
including: faster generation of ideas, offerings to its stores, thereby gaining 12 percent less per USD of revenue
staying up-to-date with the latest an advantage over its competitors. In compared to companies that do not9.
technological developments, and addition, this approach helps Wal-Mart Furthermore, spend analysis provides
offering access to more expertise in strengthening its relationship with higher visibility and compliance, and
than could be possible with in-house customers, by giving them a say about enables identification of opportunities
employment. the product offering. Thus, by opening for leveraging volumes or engaging in
up its business to external ideas from partnerships with key suppliers. The
One organization which successfully suppliers and consumers, Wal-Mart second application of sourcing analytics
used crowdsourcing in its open acquired a more competitive offering, is sourcing optimization. By using tools
innovation program is Wal-Mart. In clearly illustrating the potential of the such as advanced bid analysis, inventory
2012, this firm launched the “Get crowdsourcing approach. analysis and vendor managed inventory
on the Shelf” program, opening up analysis, companies are able to identify
their business model to drive supplier new vendors, maintain a lower level
innovation and enhance product 3. Crunching the numbers of inventory, and successfully analyze
offerings7,8. The program encourages - advanced sourcing alternative, potentially more competitive
small suppliers and entrepreneurs to bids. Finally, sourcing analytics can be
showcase their ideas for new products.
analytics
applied for supply risk assessment.
Furthermore, it offers suppliers with the Sourcing and procurement functions are By evaluating performance and risks
most compelling ideas the opportunity slowly moving away from a cost reduction metrics based on real-time data, firms
to bring their ideas to the market to a value generation focus. Whereas can assess financial and operational risks
through Wal-Mart’s existing promotion cost structure analyses have become within their supply base. This enables
and placement channels. As part of the commonplace, advanced sourcing the development of more effective risk
program, customers are then invited analytics that can reveal opportunities for measures that either anticipate (pro-
to vote online on the products which value creation can provide organizations active) or counter (reactive) threats to the
they would like to see most in Wal-Mart with renewed competitive advantage. firm’s supply.
stores. Next, Wal-Mart selects three These tools can tell organizations what is
products that are sold online, and also happening in their business and how well
features a ‘grand prize’ winner on its they are servicing its needs. Advanced
home page and in selected stores. sourcing analytics cover three main areas:
16Supplier Relationship Management (SRM) Research 2016-2017
One example of powerful sourcing 4. Tuning in to the market –
analytics is Sourcemap, a tool that can
social listening
be used for supply risk management10.
For example, firms can enter data about By being sensitive to what is happening
material types, quality levels, lead times in the digital environment, firms can
and sourcing locations, while suppliers better stay on top of supply trends
are also invited to add additional and anticipate more effectively to
information in order to map the sub-tier opportunities and threats. Social
supply chain. Based on this information listening, or the mining, of data from
and external sources, Sourcemap, social media and other forms of digital
visuallizes end-to-end supply chains in communication, has been widely used
real time, identifies the ‘weakest links’ in by marketeers in recent years. Its use
firms’ global supply chains, and sends in the supply chain context is still at a
automated alerts in case of potential nascent stage. Only slowly, firms are
supply disruptions. Ultimately, this starting to see social listening as a
enables firms to anticipate and respond promising means for monitoring and
to supply threats in time, and to build responding to developments in the
more resilient supply chains. upstream supply chain.
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Figure 3 - Example of supply chain mapping through sourcemap.com
Commodity Chain Analysis Bridg... Curry208 Nov 13, 2012
North American Tire M...
2
Zaventem Regional Office
2
Woodstock,
2 2 Canada St... Usansolo, Spain Stee... 4
Shenyang, China Stee...
China Tire Manufactu...
Saga, Japan Steel Co...
2
Lake Charles, USA Sy... 2 Shanghai,2China Regi...
Dubai Regional Office
Rayong, Thailand Car...
3 3
Harbel, Liberia Natu...
Australia Tire Retre...
Data © 2009 OpenStreetMap. Rendering © 2009 CloudMade.
Source: www.sourcemap.com
Commodity Chain Analysis Bridgestone
Truck Tire http://srce.mp/19KukS5
This is a map representing the global production locations of the
Bridgestone truck tire. This illustrates the geographies of the
different stages and processes involved. This is fairly detailed, but if
zoomed in, each location can be expanded and more clearly
viewed. Download for Google Earth
Curry208, November 12, 2012
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Discussion
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17For example setting up social supplier has developed ‘the Warehouse’,
platforms, companies can significantly an internal social media site where
improve communications and improve different supply chain actors (e.g. store
supplier performance. One example managers, DC managers, suppliers)
of such a platform is Supplier Wire, can discuss problems, for example
established by Lockheed Martin11. related to order quantities or quality
This platform is specifically targeted levels, and share best practices12. This
at its vast and diverse network of program has successfully reinforced
small suppliers. It enables these connections with the various nodes in
suppliers to familiarize themselves the upstream supply chain by enabling
with Lockheed Martin’s procurement them to voice their problems. It has
practices, and allows them to pose enabled Home Depot and its partners
questions to subject matter experts to collaborate more fluently. Despite
during live chat sessions. Thus, Supplier these promising examples, 60% of
Wire has enabled Lockheed Martin procurement departments do currently
to strengthen supplier relationships not interact with suppliers through any
through new connections in a virtual social medium, signaling a considerable
environment. Similarly, Home Depot potential for improvement.
Conclusion
Supplier Relationship Management is undergoing rapid development. It is no longer
about minimizing the cost of separate transactions, but about maximizing the value of
the complete supplier engagement. Leading procurement executives are beginning
to recognize that developing partnerships with key suppliers can indeed deliver
substantial benefits to both buyer and supplier.
Digital technology and big data are major drivers for these developments and will
continue to change the way supply chain partners collaborate. To keep abreast of
these developments, leading organizations must apply appropriate digital tools and
develop the necessary capabilities to derive meaningful information and insights
from across the entire supply chain. This will only become more important with the
increasing complexity of tomorrow's supply chain.
Sources:
1. Capgemini research
2. Wynstra, F., ten Pierick, E., 2000. Managing supplier involvement in new product development: a portfolio
approach. European Journal of Purchasing and Supply Management 6 (1), 49– 57.
3. Unilever: https://www.unilever.com/about/suppliers-centre/partner-to-win/
4. Novozymes: http://report2014.novozymes.com/business--strategy/strategy
5. Novozymes: http://www.novozymes.com/en/news/news-archive/Pages/Novozymes-recognized-for-
innovation-by-Unilever-.aspx
6. Caterpillar: http://www.bloomberg.com/news/articles/2010-10-20/caterpillar-s-oberhelman-enlists-
suppliers-in-targeting-25-profit-margin
7. Walmart: http://corporate.walmart.com/_news_/news-archive/2013/07/01/get-on-the-shelf
8. Walmart: https://www.ideaconnection.com/open-innovation-success/Walmart-Hosts-Open-Innovation-
Talent-Contest-for-New-00401.html
9. APQC benchmark
10. Sourcemap: http://www.sourcemap.com/
11. Lockheed Martin: http://www.lockheedmartin.com/us/suppliers.html#
12. The Home Depot: https://smbp.uwaterloo.ca/2013/06/the-home-depots-warehouse/
18Supplier Relationship Management (SRM) Research 2016-2017
1920
Supplier Relationship Management (SRM) Research 2016-2017
SRM Functionality Analysis
21For organizations embarking on their Set up of the Supplier
Supplier Relationship Management
Relationship Management
(SRM) journey, often the most difficult
challenge is the ability to understand the
Survey
spectrum of vendors that could satisfy The SRM Survey is an assessment
the organizations requirements. of the functionalities of SRM systems
available in the market. Our research
The key questions that are often represents the data collected from SRM
considered are: vendors without any interpretation or
Which applications are available on judgment. Participation to the SRM
the market and what functionalities Survey is voluntary and some vendors
do these applications provide? have unfortunately declined our invite
to participate*. However, our survey
Do applications offer the same covers the vast majority of current SRM
services across all aspects of the solutions in the global market place.
procurement function or are they
specific to one component of SRM? A functionality analysis was conducted
based on a list of 155 questions,
This chapter will elaborate further on covering the entire spectrum of the
these questions. SRM process. These questions
represent the “most asked-for” and
Supplier Relationship Management
the “most-critical functionalities”, as
depends on collaboration amongst
we recognize them from our client
the enterprise’s internal and external
discussions and interactions. Vendors
suppliers for survival and progress.
were given the opportunity to indicate
Collaboration across sourcing
whether the requested functionality is
strategies, management and
available or not.
governance remains critical to the
success of Supplier Relationship In line with our previous editions we
Management. want to ensure that the survey evaluates
the market to a level of depth and
completion required to accurately
present the relative strengths/
weaknesses of the vendor landscape.
We have built in random checks to
ensure that the solutions score as
accurate as possible.
22Supplier Relationship Management (SRM) Research 2016-2017
While interpreting the data, it is 3. Sourcing ( incl. Electronic Tendering/ The functionalities needed for this are
important to remember that this analysis eAuctioning) currently mostly delivered by PLM
is based on a series of questions vendors, but an increasing number
4. Supplier Data Management
designed to address whether the of traditional SRM providers are
software covers a specific set of 5. Supplier Performance Management also moving towards these kinds of
functions. It is important to note that functionalities.
6. Contract Management
all of the questions have been scored
without weighing. This means that a 7. Catalogue Management We added the New Product
high or low score does not indicate Development phase as a new third
8. Operational Procurement
whether an application is good or bad; it cycle in our Capgemini Procurement
merely states the coverage of the SRM 9. External Resources Process Model. Within the New Product
functionality within the application. Development circle we see six different
In addition to the previous edition we steps which will result in the Bill of
While selecting or evaluating an assessed the level of support in the Materials. These six steps and relevant
application, it is important to determine area of Supplier Data Management and functionalities are assessed in this study
which functions are critical for your Product Lifecycle Management. (PLM chapter) next to the functionalities
company’s procurement processes. in the two 'traditional' cycles: strategic
Therefore a weighted score addressing We see an increasing need for sourcing cycle and the procurement
your preferred functionalities may procurement to be involved in early order cycle.
result in a different outcome from product design and be the linking pin
those shown in this survey. In order to for earlier supplier involvement and In each chapter we will indicate which
distinguish between the functionalities collaboration to gain the maximum out part of the procurement process
of the applications, it is necessary to of the supply chain. This has several is addressed in the Capgemini
understand which functionality supports advantages including cost reduction Procurement Process Model below.
the procurement processes. opportunities, shorter time-to-market,
a better shared vision and proposition
To assess the level of support of the towards suppliers, greater spend control
applications in the SRM process, we and more supplier involvement.
divided the overall SRM process into
nine sub-categories: To tackle this new role procurement
professionals also need new systems
1. Procurement Intelligence and functionalities to facilitate and
2. Product Lifecycle Management support them in their communications.
(PLM)
Figure 1 - Capgemini Procurement Process Model
Procurement Intelligence
Product Collaborative Develop
RFx Place Approve
Development Product Sourcing
Design Process Requisition Requisition
Strategy Strategy
Manage Analyse Supplier
Product Strategic Manage Place
Product New product needs & Selection Procurement
Data Mgt Sourcing & Contract content Order
Require- development market Order Cycle
ments dynamics Cycle Finalisation
Manage Manage Manage
Verify process Receive
Product Product Supplier Negotiate
and invoice goods
Lifecycle Portfolio Performance
23Overall Functionality Analysis
As in previous studies, this year’s Non functional: Provide wider capabilities for
vendor review shows that the managing contracts for improving
Mobile app support
differences between applications are governance, insights, compliance,
most visible in coverage at a functional Transforming the user experience and value maximization in contract
level. management beyond procurement
Redesigned interfaces
contracts.
Some applications provide full coverage Use of the most advanced
Enhanced supply chain analytics,
for all sub-processes, whilst others can technologies for increased security
real-time spend-analytics with
be considered niche players supporting
The main innovation points for the forecasting capabilities and what-if
only a limited number of functionalities.
next 2 years analysis
Although the reviewed SRM
applications are very capable, there are Functional: Accounts Payable automation,
substantial differences between these expanding payments coverage
applications and of course each of Tighter integration for a holistic
Source to Pay framework, complete Services procurement
them will have a different fit within your
organization. Although it might seem network integration
Non functional:
that certain applications have a low Supply chain process integrations
overall score, yet we cannot conclude User experience upgrade, user
these applications are of lesser quality. Stronger integration to ERP’s interface improvements
Further integration with supplier Mobile enablement, securing
Before we go into the detailed portals optimal mobile access
functionality analysis, we want to give
you some insight in new developments Further integration with direct
Industry solutions
in the SRM market. procurement, Product Lifecycle
Management (PLM) Some vendors started to develop
industry-specific applications,
New country and market-specific
Main Innovation Points which provide a tailored solution to
solutions
help organizations. The solution is
Looking at all the vendors surveyed, the Sustainable procurement preconfigured for a particular industry
main innovation points from the last 2 – to provide business users the exact
years have been: Supply chain finance & dynamic
discounting functionality they need, when and where
they need it. Up to 40 percent of the
Functional: Enhancing supplier risk vendors indicate that they have an
Full integration between different management capabilities and industry/sector specific solution.
modules advanced supplier performance
management
Supplier management
Supplier portal
Payment solutions to provide
visibility into business payments and
produce rich remittance information
to improve the reconciliation
processes
Collaborative buying tools
24Other vendors indicate that they are Some vendors make a distinction
either: between the different stages of the
Product Life Cycle for direct materials:
"Industry agnostic” meaning the
solution set is suitable for any Sampling
industry;
New product introduction
Or, there is no specific industry
Growth
solution since there is one (Saas)
version for all customers. Maturity
Decline
Integration of Direct Procurement
End of life
Direct and Indirect procurement are
terms used to indicate if a procurement
Every stage could have different
category is directly related to the
processes and templates:
primary business of an organization.
Direct procurement refers to third Processes that contain templates
party services and goods that are which apply to the different stages
part, or used in the manufacturing, of a lifecycle and allow the revision
of the organization’s products and/or and versioning of material, part,
services. Indirect procurement refers components and semi-finished
to categories of goods and services goods.
that are supporting the organization’s Specific milestones for sampling,
business processes. Similar terms new product introduction and
commonly used by manufacturers are technical collaboration processes
Product Related (PR) vs. Non-Product like upmarking drawings, workflows
related (NPR) for respectively Direct- on drawings and integrating
and Indirect procurement. comments to facilitate the sampling
and new product introduction.
For most organizations Direct
procurement represents a much larger End of life is especially supported
percentage of total spend than Indirect by the phase out of supplier
procurement. Subsequently Direct and transfer processes to the
procurement becomes interesting new source. Set expiry dates for
when searching for an eProcurement products and store history on
solution. Therefore we investigated if "dormant" end of life products.
procurement software facilitates the
procurement of direct materials and if Please see the section on Product
the process is related to different stages Lifecycle Management for more detailed
in the Product Life Cycle. insight in PLM functionality.
25Supplier Marketplace (portal)
A marketplace allows the buyers and the suppliers to work together more efficiently and effectively on all the shared aspects of
business commerce: proposals, contracts, orders, invoices, and payments. Out of all vendors surveyed 22 vendors offer a supplier
marketplace
Table 2 - Supplier Marketplaces
Company Name #Suppliers connected #Buyers connected
Ariba Ariba Network 1.7 Million 400
BiP Solutions Delta CompeteFor > 100.000 >500
b-pack b-procure 750.000 1.000
BravoSolution BBNET BravoSolution Network >700.000
Capgemini IBX IBX Supplier Network 550.000 350
CTM/ EU-Supply Collaboration area >250.000 >6.500
eeeBid www.eeebid.com 102.466 87.500
Esize Esize SupplierWeb 200.000 150.000
GEP The Hubwoo Business Network 1.000.000
Ivalua Ivalua Supplier Portal
Negometrix Marketplace &
Negometrix Qualification system 30 40.000 users
Oracle
Perfect Commerce Perfect Commerce 250.000 200
POOL4TOOL 2relation.com 200.000 240
PROACTIS PROACTIS Supplier Network >50.000
SAP Ariba Network >1.7 Million 400
SciQuest SciQuest Supplier Network 500.000 >500
SupplyOn SupplyOn 100.000
EflowXpress and
Tblox FreeSupplierPortal >250.000 >750.000
TradeStone Software Bamboo Rose
VORTAL VORATAL Suppliers Finder 118.000 2.000
WALLMEDIEN Meplato Mall >10000 >50.000
Based on information delivered by solution providers
26Supplier Relationship Management (SRM) Research 2016-2017
The costs for using the marketplace are Overall conclusions from this year’s services. Product Lifecycle
different for suppliers and customers. survey Management (PLM) is about
In most cases there are no charges having cooperation with suppliers
Considering the survey as a whole, the
involved for suppliers. Sometimes, a in product and process innovation
following represents the major findings
fixed annual fee or a transaction based and it starts before the Sourcing
and conclusions:
fee applies or they offer basic services process. Overall, 8 vendors
for free and premium services at a fee. 1. Amongst the top 10 vendors offer PLM functionality with an
For buyers the charges are mostly there is little to choose across average of 73 percent functional
transactional volume based subscription the principle functionality. coverage. Product Development
fees. Sometimes the usage is included Sourcing, Supplier Data Strategy (84 percent) is the highest
in the modules so without additional Management and Supplier supported functionality followed by
charges. Performance Management are Managing the portfolio strategy (78
the best supported functionalities percent) and Managing product
Vision on Sustainable Procurement demonstrating the focus of the requirements (75 percent).
top 10 vendors on the Sourcing
Nowadays the debate on sustainability 4. 80 percent of the vendors
circle. Supplier Data Management
exists in every company. Sustainable surveyed offer Strategic
and Supplier Performance
procurement is a core function for Sourcing functionality as
Management are usually part of
supporting needs related to CSR compared to 70 percent who
Strategic Sourcing therefore this
(corporate social responsibility) and offer Operational Procurement
link is not surprising. Overall, the
wider GRC (governance, risk and functionality. 60 percent of
key differentiators in functionalities
compliance) requirements. Some the vendors have a higher
are Product Lifecycle Management
vendors have specific tools that allow score on Sourcing functionality
and External Resources
organizations to address these issues. compared to Operational
functionality.
Concepts such as global geographic Procurement; 20 percent of the
sustainability dashboards, certification 2. Out of all of the vendors surveyed, vendors have a higher score on
and integration of external sustainability 90 percent offer Procurement Operational Procurement, overall
data and consideration of sustainability Intelligence functionality, which demonstrating a greater focus on
data in supplier performance ratings demonstrates the importance of Strategic Sourcing.
are gaining more relevance. Vendors tracking operational improvement
5. The majority of the vendors see
have started to offer the following benefits and assessing and
Electronic Tendering and
functionalities: ensuring compliance. There
develop and issue RFX documents
is, however, a huge diversity
Monitoring/tracking supplier as core functionality of Strategic
in coverage ranging from 45
requirements (e.g. certifications) Sourcing. All of the vendors that
percent to 100 percent. Spend
offer sourcing provide Electronic
Automated processes and analysis and reporting are the
Tendering functionality.
reminders for supplier certification functionalities that are most mature
(renewal and reminder management) within procurement intelligence 6. Supplier Data Management
(average 90 percent) followed by consists of defining and
Revision of product/ingredient
advanced analytics (average >80 maintaining all relevant supplier
certification.
percent). data. Vendors acknowledge the
Dashboards with KPI's on importance of good Supplier Data
3. In order to get maximum value
sustainable procurement Management as the basis for the
from the supply chain, it becomes
External sustainability enrichment entire SRM process. All Vendors
more and more important to
(e.g. Ecovadis, D&B) (except 1) offer this functionality
cooperate with suppliers in
although there is a huge range in
Supplier code of conduct specifying products and/or
diversity (from 10 percent to 100
percent). Overall, 75 percent of
27the vendors offer more than 80 9. Catalogue management percent). Followed by Approval
percent functionality. The main is a fundamental part of the and Selection and Ordering
focus is on Managing Supplier Operational Procurement process. (>65 percent). Lowest functionality
Attributes and Collecting Therefore it is not surprising is offered within Monitoring and
Supplier Information. that the vendors that do not Evaluation (>55 percent).
offer Operational Procurement
7. Supplier Performance
functionality also do not offer
Management mainly concentrates
Catalogue Management
on performance management,
functionality. 21 vendors surveyed
meaning the measurement and
provide Catalogue Management
evaluation of mutually agreed
functionality of which 9 vendors
performance indicators and
provide 100 percent coverage.
scorecards. This functionality
is still increasing in richness 10. 70 percent of the vendors
and capability compared to surveyed provide Operational
the previous SRM edition. This Procurement functionality.
year’s survey shows an average Strongest sub-functionalities are
of 79 percent compared to Purchase Order generation and
64 percent last edition. There Approval functionality (100 percent)
are only 2 vendors that do not followed by Requisition and Invoice
offer this functionality. Defining functionality (95 percent). The new
consistent performance criteria, functionalities Invoice Scanning
in addition to SLA and other (60 percent) , Invoice Matching
contractual terms and conditions, (4 way match (33 percent) and
is important for organizations to 5 way match (27 percent) and
measure supplier performance Payment (43 percent) are the
as well as Evaluating Supplier main differentiators and we expect
Performance by scorecards and/ that functionality will increase over
or questionnaires. the next couple of years.
8. 11 vendors offer complete (100 11. This survey shows that 3 vendors
percent) Contract Management have started to develop External
functionality. 4 vendors responded Resource functionality in the last
with a score of less than 75 years but there are still some full
percent coverage in this area, suite vendors that do not offer
with the average score above 85 External Resource functionality yet.
percent. This is not surprising given Out of all of the vendors surveyed,
the need to link the benefits that 53 percent offer External
are identified (sourcing) to benefits Resources functionality, as
being delivered (Operational compared to 48 percent in the
Procurement), which is achieved previous SRM survey. On average
by benefits being captured as part 71 percent of functionalities
of contract management activities. is covered, which still leaves
The highest functionalities can room for improvement. Highest
be found in using standard functionality is offered for Specify
templates when registering a and Requisitioning (average >80
contract; Contract Lifecycle
Management and Contract
storage.
28Supplier Relationship Management (SRM) Research 2016-2017
Figure 2 - Overview
Product Supplier
Procurement Supplier Data Contract Catalogue Operational External
Company Lifecycle Sourcing Performance
Intelligence Management Management Management Procurement Resources
Management Management
Ariba 100% 0% 95% 100% 92% 100% 100% 92% 100%
BiP Solutions 100% 0% 97% 94% 100% 100% 0% 0% 0%
b-pack 59% 0% 77% 98% 83% 91% 100% 100% 0%
BravoSolution 86% 0% 100% 98% 96% 83% 0% 0% 0%
Capgemini IBX 72% 0% 88% 80% 77% 100% 100% 95% 65%
CTM/ EU-Supply 59% 0% 100% 90% 100% 100% 100% 97% 40%
eeeBid 100% 71% 100% 98% 100% 97% 90% 84% 75%
Esize 97% 0% 98% 94% 88% 100% 95% 92% 95%
GEP 66% 0% 98% 100% 100% 100% 100% 95% 0%
Inconto 41% 0% 5% 10% 0% 74% 60% 73% 55%
Ivalua 93% 0% 88% 100% 92% 94% 100% 62% 80%
Negometrix 45% 0% 92% 96% 83% 94% 0% 3% 70%
Novatus 0% 0% 8% 84% 63% 97% 0% 0% 0%
Oracle 72% 51% 82% 84% 88% 94% 95% 89% 0%
Pactum 0% 0% 0% 59% 79% 74% 0% 0% 0%
Perfect
Commerce 76% 0% 80% 73% 88% 86% 100% 76% 65%
POOL4TOOL 72% 87% 88% 100% 96% 46% 60% 95% 0%
PROACTIS 76% 0% 91% 90% 88% 86% 100% 92% 65%
SAP 93% 99% 100% 100% 100% 100% 100% 78% 100%
SciQuest 72% 0% 85% 84% 71% 100% 75% 76% 35%
Selectica | IASTA 52% 0% 83% 84% 58% 100% 0% 0% 0%
Spend360 93% 0% 6% 0% 33% 0% 0% 0% 0%
SupplyOn 97% 77% 95% 100% 100% 94% 90% 89% 75%
Symfact 0% 0% 0% 90% 71% 100% 0% 0% 0%
SynerTrade 97% 80% 100% 86% 100% 100% 55% 84% 90%
Tblox 93% 58% 100% 100% 96% 94% 95% 95% 90%
TradeStone
Software 79% 62% 71% 94% 67% 74% 80% 86% 0%
VendorLink 97% 0% 0% 96% 100% 80% 0% 0% 0%
VORTAL 45% 0% 82% 90% 92% 94% 70% 41% 0%
WALLMEDIEN 48% 0% 0% 59% 0% 0% 100% 78% 35%
Figure 2 gives an overview of the available functionality of each vendor application based on information delivered by solution
providers. The Y axis represents the vendors and the X axis represents the categories within the SRM suite.
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