How to Start a Movement: Towards Supplier Relationship Management

Marina Sologubova September 29, 2015

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More than 15 years of professional experience in Procurement and Supply Chain. Global roll out of Johnson & Johnson Supplier Relationship Management (SRM) program combined with the development and implementation of SRM software solution. Previous experience at Unilever and Procter & Gamble. PhD degree in Economics, MBA in Supply Chain, a degree in IT and Electronics.

Marina Sologubova PhD, MBA

Johnson & Johnson is the world's most comprehensive and broadly based health care company, with products and services for the consumer, pharmaceutical, and medical device markets. It is organized into several business segments comprised of franchises and therapeutic categories

How to start a movement?

https://www.youtube.com/watch?v=V74AxCqOTvg

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Traditional Time Allocation of Procurement

Procurement is still primarily seen as a contributor to cost-cutting initiatives

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that helps to maximize the value from interactions with third party organizations that supply goods and/or services

SRM becomes a key differentiator

as it creates transparency and process efficiencies while improving knowledge management

IT is an important enabler

Today SRM is on the TOP-10 List of Factors Impacting Procurement in 2015

Towards Supplier Relationship Management

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Competation on the price Partnering focused on value creation

Marketing

Operations

Quality

Logistics

Research & Development

Finance

Marketing

Operations

Quality

Logistics

Research & Development

Finance

Supplier Buyer

Sales Procurement

Traditionally supplier management and partnerships are often a concern of the procurement function and sales function, with little involvement of the business.

Sales

Marketing

Operations

Quality

Logistics

Research & Development

Finance

Procurement

Marketing

Operations

Quality

Logistics

Research & Development

Finance

Supplier Buyer

Traditional Supplier Management Supplier Relationship Management

Jonson & Johnson created framework to standardize and facilitate deployment of Supplier Relationship Management (SRM) program across it’s organization

-Workfow based system with clear tasks and deadlines assigned -Cross-regional alignment on the terminology and supplier classification -Visibility to shared suppliers /parent companies cross-region and cross -sector -One common database with single supplier record controlled by administrator -Full overview per supplier with the integration to other systems

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Multiple Geographical

Locations

Data Availability Cross Functional

Engagement

Adherance to Standards &

Process

SRM Software solution allowed us to have good visibility of our supplier base in different regions, be closely aligned on definitions and drive overall process standardization

Business Risk (Returns compared to industry average)

Business Impact

Segment 3 Transactional

high

low

low high

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Segment 1 Strategic

Segment 2 Development

Segment 2 Preferred

The position in the supplier grid determines how intensely each process is executed and managed between the buying company and relevant supplier

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Strategic Goals Setting and Partnership Development. . .

. . . Prioritization, Resource Allocation and

Course Correction

. . . Execution to Plan and Day to Day Decisions

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Business Review Running the Business

Governance Meeting

Strategic

Building and managing a partnership is like building and managing a new department or business entity

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Text

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-Meeting/Event Schedule -Meeting Agenda -Meeting Notes

-Supplier Scorecard -Aggregation at parent company level -Workflow based - Cross-functional input

-Issue Escalation/Resolution -History

-Colloboration

Monitor & Assess Risks - Financial - Contractual - Quality - Health & Safety - Enviromental etc.

Focus on iterative program steps to yield true benefit and unlock the value

THANK YOU

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