Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
Highlights
- Recent health scare and geopolitical tensions underlined the pivotal role that suppliers play in ensuring resilient supply chains and customer experience.
- By prioritizing and nurturing supplier relationships, retailers can improve the stability and reliability of their supply chains, better positioning themselves for peak season demands and disruptions.
- It is essential to strengthen supplier relationship with supplier experience management (SXM), which levels the playing field for retailers and suppliers to achieve mutual growth targets.
- The key to achieving success in SXM is to eliminate friction from every aspect of supplier interaction and provide a seamless, integrated business experience.
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Experience is key
Supplier experience management (SXM), which considers suppliers as partners and enables mutual growth, is gaining precedence.
With the growing realization about the critical role that suppliers play in ensuring resilient supply chains and customer experience, the need for better retailer-supplier collaboration is now being widely acknowledged.
Unlike traditional supplier relationship management (SRM) that is largely one-sided and focuses on retailer’s growth targets, SXM is more empathetic and aims to build a frictionless business experience (BX) for suppliers and is the way forward in supply chain management.
Why the buzz around SXM
Reeling under the impact of COVID-19, retailers began to acknowledge the role of suppliers in driving their strategic growth.
Many retailers lost revenue due to supply shortages and it was widely recognized that enhanced supplier collaboration is key to unlocking true value.
SXM levels the playing field for retailers and suppliers. Instead of a singular emphasis on implementing processes to mitigate risks, save costs, ensure regular supply, and assess supplier performance and compliance, SXM empowers suppliers to achieve mutual growth targets. This paves the way for improved collaboration, a key factor in achieving resilient supply chains. SXM refers to all the dimensions and touchpoints of retailer interaction with suppliers. In addition to measuring performance and setting up targets for suppliers, it requires the retailers to identify issues, opportunities, and improvements across supplier touchpoints, enabling the supplier to deliver desired outcomes. When a supplier’s wants and needs are recognized, the retailer can unlock new collaboration models, reimagine the supply strategy, and mitigate supply risks, thus ensuring timely deliveries, effective inventory management, and consistent product availability even during peaks and the holiday season.
The first step to eliminating friction is to identify it
The key to achieving success in SXM is to eliminate friction from every aspect of supplier interaction and provide a seamless, integrated business experience across critical SXM dimensions.
Friction refers to anything that is a deviation from the optimal way of doing business with suppliers impacting critical KPIs such as inconsistent and inefficient processes leading to higher turnaround time, lower productivity, and poor data quality. Other examples include:
Having to interact with multiple systems and teams
Legacy ways of working such as manual processes, spreadsheets, and emails
Lack of a formal communication framework and channels, causing delays in addressing supplier queries and complaints
Lack of clarity, transparency, and visibility into retailers’ internal processes
Improper monitoring of commercial deals leading to billing errors
Inconsistent and inefficient legacy processes
Lack of feedback and a virtuous loop of positive interaction
Principles of frictionless SXM
Removing friction from SXM dimensions and touchpoints might seem straightforward, but it requires well-thought-out actions.
The following principles serve as guidelines for achieving optimal results:
Supplier enablement: Enable suppliers to discharge their responsibilities efficiently and independently. Provide the support required such as trainings, demo, and support documents.
Supplier empowerment: Listen to the voice of suppliers and understand how you can help them. Let them know they are heard and communicate the changes made. Provide them with the necessary tools, optimize processes, and institute a channel for seamless interaction and collaboration.
Mutuality: Progress towards collaborative growth and a long-term relationship that is mutually beneficial and based on sharing value.
Transparency: Provide visibility into internal processes and policies and be transparent in addressing the concerns of suppliers.
Digital readiness: Enable solutions leveraging digital levers to facilitate supplier engagement and collaboration.
Data-driven: Use real-time and predictive insights to track and deliver business outcomes. Gather data on process inefficiencies, errors, and deviations and harness them for enabling a culture of continuous improvement.
Minimal manual intervention: Automate repeatable, transactional, and mundane activities to free up time for strategic activities.
SXM maturity assessment
Supplier experience transformation begins by baselining the current maturity level.
Prescribed below is an SXM maturity assessment that retailers can use to evaluate their maturity across seven key SXM dimensions. It also provides recommendations to enable a frictionless supplier experience.
Against each dimension, retailers will be benchmarked with the maturity level that best reflects their current ways of working:
Ad-hoc: Low emphasis on SXM, with a unidirectional approach in managing suppliers
Enabled: Moderate emphasis on SXM, with a few departments or functions using SXM initiatives that are disparate and specific to each function.
Optimized: More widespread emphasis on SXM, with almost all functions using SXM initiatives. At this level, operational silos are removed and SXM initiatives are synchronized across functions across the enterprise. This level, however, lacks a framework to focus on continuous improvement.
Transformed: Emphasis at the enterprise level, with centralized management of initiatives and a clear mechanism to continuously assess and improve supplier experience.
After baselining their current maturity, retailers should take appropriate action based on the recommendations prescribed in the maturity assessment framework. Here is a sample of how retailers can enable SXM in its most mature state, ‘Transformed’, across all the dimensions (Figure 1).
Supplier experience management (SXM) in its most mature, or ‘transformed’, state
Enabling a frictionless supplier experience in a retail organization requires a structured approach with regular monitoring. Also, it must be a continuous activity where shortcomings must be assessed every year. Retailers must realize that this is like a marathon with a drive for quality but with no finish line.
