Proxima — See the change

Insight & opinion


The next step to supplier success

Guy Strafford
Jun 25, 2014 4:34:00 AM

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At Proxima, an essential part of our work is making sure our finger is on the pulse of opinion and sentiment in our clients’ markets. It means that our advice and strategic development work is contextualised correctly within the environments in which our clients operate, which in turn enables us to find the best solutions to their challenges.

Over recent years, we have delivered several pieces of research, which together reaffirmed what we suspected. That the increased complexity of businesses’ operating models has not been reflected in the way the resulting enlarged group of suppliers is managed. Nor, crucially, do senior leaders understand the full value enhancing potential of effective supplier engagement. The findings of our previous research were real food for thought and it got us thinking. What might be the next step?

Business has changed – now what?

Now that we had proved the significance of the supplier in a modern company, we wanted to explore the ways in which relationships could be maximised to benefit the wider business, across the myriad of strains of modern supplier management.

It is for this reason that Proxima is delighted to be delving again into another area of research. In our line of work we relish the opportunity to enable CEOs to look at procurement in different ways, highlighting the disconnect between the function and other departments, urging businesses to enable procurement to get deeply involved with suppliers to find out more about them. We often hear procurement professionals complaining they are not embedded into the fabric of the company and feel misunderstood.

There is no better case, however, than cold, hard results. The best way of illustrating and indeed proving the potential of the supplier as a force for business good, is evidence. We are therefore excited to launch this new three-month study drawing on the perspectives of a large cross section of international businesses, which will poll sector participants in the ways that suppliers contribute to the changing business operations.

Getting more from your suppliers

Our previous study around corporate virtualization showed that large businesses today spend 70% of their turnover on suppliers but that many continue to struggle to gain maximum value from those relationships – particularly in non-core, high spend areas (such as Marketing, IT, Professional Services and Facilities Management). We are seeking to show how improved management of these suppliers can be a driver of business performance not just financially but in terms of environmental and social impact.

As we pointed out in the Harvard Business Review recently, the key point is that businesses can no longer afford to down play procurement. Suppliers must be seen as an extension of the company they serve; they are a driving force for innovation and could be critical partners in the company’s success.

I look forward to sharing the results of this next piece of thought provoking research and seeing whether we can edge a little step closer to the holy grail of business environments where suppliers, procurement people and management work together to realise collective goals and enhance the value that they deliver to all links in the chain.

Guy Strafford

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