Anyone who has climbed a few rungs up the corporate ladder knows the sense of achievement that comes with reporting directly to the C-Suite executive level. Sometimes that feeling of smug self-satisfaction can last for as long as 20 minutes before being replaced by a toothache-like dread that an occupant of your company’s Corridor of Power will appear in your office demanding information that surely ought to be right at the fingertips of any competent procurement, category, sourcing, purchasing or supply chain manager.
Zeroing in on those questions that sound so reasonable yet send you straight into a cold sweat is a special skill that only top executives seem to possess. Whether you’re already at those heady heights of management or you’re dreaming of getting there some day soon, the following case studies will help you prepare for the day the CPO, CFO or even CEO comes knocking.
CEO: I need to sign off on supplier compliance for the annual internal controls report, can you have the necessary assurances on my desk by close of business?
The answer you want to give is “err probably if I start gathering it right now,” but of course, you simply acquiesce, grab another coffee and start working out what you need. First off, a list of suppliers, that’s easy enough, the approved suppliers are on Sharepoint (please, tell me it's up to date!), you can run off a report.
Next, you’ll need the compliance data. That means copies, or at least status, of their relevant and latest ISO certificates, those should be in their individual supplier files/folders, then there are the antislavery and child labour statements, those will mostly, or at least should be in the contracts themselves. Oh, best include the latest spot audit reports too, they are neatly tucked away in their own folder in the audit manager’s email, lets hope she’s in the office today.
Gathering it all is one thing, presenting it in a way that the CEO can read, understand and sign off on it in the 30 seconds he has set aside for the task is another. Still, you’ve got till 5PM and it’s only just gone half past three.
It sounds farcical, but businesses up and down the land go through exactly this routine every year. There has to be an easier way, and the answer lies with Kodiak Hub’s SRM software. With supplier scorecards and analytics all in one place, you can run off the necessary report in the time it took your CEO to ask for it. But that’s not even the best part. Kodiak Hub’s software allows you to assess and audit compliance with confidence, raising flags if documentation is missing or expired so that you can deal with it before it becomes an issue.
Check out this article on How Procurement Teams are Drowning in Data without being able to leverage it
CPO: I was on a course last week where they showed how suppliers can be segmented according to risk and profitability. I think it was called a Kraljic Matrix. Can we do that?
Your first thought here is a dawning realisation that you need to warn the rest of the team that the CPO has been on another one of those training courses. Your second is that “we” means you.
Being the fair-minded person you are, your third thought is to admit the CPO is onto something here. A Kraljic Matrix provides a great way of focusing attention where it matters when it comes to either minimizing key risks or potentially reducing costs in the supply chain.
When your supplier data consists of a purchase order here, a price list there and a contract with some meeting minutes attached to it somewhere else, you quickly realise that performing this segmentation is going to take some time, and will involve more gut feel than anything else. Kodiak Hub’s supplier ratings software can help you to grasp which suppliers belong in which segments based upon the rating criteria that matter.
CEO: The board has approved our new standard terms and conditions of business. We need to incorporate these, or at least their key clauses, in our supplier contracts when they come up for renewal, and get any rolling contracts amended asap. I’ll need monthly updates.
Here’s an example of how a seemingly innocuous request can open up a can of worms. If you are fluent in CEO speak, it will be that parting shot about the monthly updates that causes a slightly uncomfortable feeling in the stomach.
This whole task rests upon you having good information to hand on what contracts are in place and when they expire or automatically renew. Earlier on, we noted that you can run a report of approved suppliers from Sharepoint (again, given your approved supplier base is actually captured in SharePoint). That’s a start, but you then need to either look into the contract repository (Excel overview?) and say a silent prayer that it reflects reality, or dig into each individual client file to check the date on each contract and potential amendments. This is likely to be when the fun really starts, as you discover first one, then another, then a third contract that actually expired months or years ago. Not to mention the “few” cases where you find no information at all.
When you have a proper SRM solution, this simply isn’t allowed to happen. You have complete visibility of what contracts are in place and when they expire. You can set up automatic notifications to give you advance warning, so there are no panics or unpleasant surprises. Best of all, in this particular example, the task of gradually updating contractual terms as contracts come up for renewal is easy to manage and to report upon. As icing on the cake, the platform provides a constantly updated overview of which suppliers have signed, while also sending automatic reminders to suppliers who haven't responded, on their respective deadlines, in time.
CPO: Who would you say are our top performing suppliers? And which ones give us the most trouble?
Here’s a really interesting challenge, and the way you go about answering it depends almost entirely on the supplier management software you have at your disposal. If the answer is a client list, some physical files and a random selection of emails on different employees’ laptops, you will be sticking a finger in the air and providing entirely qualitative answers based mostly on gut feel.
Of course, this is far from ideal. One problem is there are no metrics defining “performance” or “trouble.” The second is that the human brain - or indeed gut - is unreliable and uncalibrated. You might associate a particular supplier with a high profile problem that happened months ago and put them in the “trouble” pile when the root cause of that incident has been resolved and they are now in truth a top performer.
How much better it would be to turn to your supplier performance monitoring software and give an instant reply that is both qualitative and quantitative, segmenting suppliers according to clearly defined performance metrics. That leaves your gut free to contemplate the lunch your CPO will surely owe you after you’ve provided a clearly articulated answer on the spot.
And a million other questions
The above are just examples of some of the questions C-suite executives love springing on their direct reports. You might as easily be asked to provide a breakdown or segmentation of the supplier base by all manner of other criteria, such as category, spend, price, geography, internal responsibility/ownership, or even sustainability record.
The take away here is that you need to be able to report critical information in a simple and efficient way. And as the saying goes: what you can't measure, you can't manage.
Without dedicated SRM software, these seemingly straightforward and reasonable requests can demand hours of research that ultimately leads to desperate guesswork when the segmentation criteria are not clearly defined, recorded and accessible.
Kodiak Hub’s software holds all the information you need to answer even the most challenging questions about suppliers that your company’s executives can come up with. That’s one weight off your mind.