The Network Economy has brought about significant changes in the way businesses operate. In this economy, companies are not isolated entities, but rather part of a larger ecosystem of suppliers, partners, and logistic providers. In order to thrive in this environment, businesses must embrace collaborations and integration with their suppliers to form an extended enterprise.
Companies need to make a shift towards not only monitoring their own operation, but also those of their direct suppliers. Making collaboration, transparency, and trust within the whole supply chain a key for success.
Change management is definitely not to be taken lightly when undergoing a business transformation because it is a real transformation for people within the organization that will change their ways of working. At some point you may even have a disconnect with some internal or external stakeholders.
What is important here is to acknowledge this from the start and to set yourself up correctly from day one, with a dedicated change management team that is fully prepared when these disconnects or resistance occur.
This requires strategic alignment internally: key sponsors and stakeholders need to communicate with one voice towards internal and external stakeholders. It is important to identify internal key people who will support this change and who will help carry the voice of your program within the organization.
Centrally, the enablement strategy has to be defined and determined into a wave planning, making sure that all communication templates, training materials, process tracking, reporting, etc. are available.
Furthermore you need to involve your key suppliers along the way by keeping them informed of the benefits they will get and make it clear that, without them, this transformation cannot work. You will need to convince your suppliers by coming up with a clear value proposition; ‘what is in it for them?’. Joining the same network can result in customer retention and loyalty, growth in new business relationships, faster payment of invoices, etc.
Next to that, it is also very important to realize that supplier enablement requires time and effort. It’s not uncommon that the most advanced integration takes up to half a year to complete.
Stéphanie Noujeim, Senior Supply Chain Procurement Transformation, provides some examples:
In direct procurement, there is a shift in terms of proactive instead of reactive procurement where the buying companies and suppliers collaborate on planning, execution, and quality of their supply chain.
For indirect procurement, companies are buying based on a list of negotiated items including specifications, terms and conditions. This is materialized into a shared electronic catalogue that buyers can autonomously maintain while customers keep control by approving the prices. For many customers, around 60% of their indirect spend can be managed via these electronic catalogues. Some suppliers even propose discounts on purchasing prices in order to encourage their clients to move to such cloud solutions.
Stéphanie Noujeim, Senior Supply Chain Procurement Transformation
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