Reimagining Supplier Relationship Management with Matthew Booth

In this episode of Procurement Reimagined, host Daniel is joined by Matthew Booth, Procurement Manager (DACH) EPCM Contracts at PM Group.

Matthew shares his insights on Supplier Relationship Management, from understanding its value to how to implement it and the real-world challenges faced. Matthew also shares tips on how procurement leaders can drive organisational value.   

Matthew has twenty-five years of leadership in the procurement space. He is passionate about procurement because it creates multiple value points for the organisation, from cost and risk mitigation to innovation and sustainability.  

Key highlights:

• 04:33 - 05:38 - Reimagine SRM by Implementing it Properly - The quality of your supplier relationship is central to success in supplier relationship management. Any relationship's quality depends on how you implement and nurture it, including those with your suppliers. It isn’t implemented properly at most companies because nurturing relationships and seeing measurable results takes time.  
• 07:36 - 11:30 - The Art of Building Relationships - Matthew believes that the value we derive from SRM is just a fraction of the actual potential. Start by thinking of SRM as nurturing a friendship. People we know fall into three broad categories: acquaintances, casual friends, and close mates. After a night out, imagine it’s 2 am, and you discover that you’ve lost your keys and are locked out of your house; who would you call? Traditional procurement pivots around cost reduction, but cost reduction is not a sustainable long-term strategy. Instead, focus on building a relationship by collaborating with your suppliers, sharing goals and helping them achieve theirs while they help you achieve yours. That is the crux of SRM.
• 11:56 - 15:25 - Driving Value with SRM - Organisations need to move the needle from viewing procurement as a cost-saving function to one that delivers organisational value. They need to accept that you can’t deliver value without investing time and resources. The first value is innovation, where close collaboration with a trusted partner can shrink your GTM lead times while making your product cheaper and greener as a business differentiator.  Sustainability could be a second value driver where companies can convert existing products to more sustainable versions with collaborative inputs from key supply chain partners. This is relevant because 80% of a product's carbon footprint comes from the raw materials downstream in the supply chain. 
• 19:12 - 22:54 - Challenges to Implementing SRM Properly - The biggest challenge is the required shift of mindset with the c-suite stakeholders at a company and the ability to have faith in the process. Faith, because you won’t see results in a day or month; it could take a year or two. But the results and value derived will be transformational. The competitive differentiator value could come from a reimagined and engineered product, a lower carbon footprint, or a new innovation stream. 

Quotes:

•  “I have been in procurement for over twenty-five years, and I have yet to see Supplier Relationship Management implemented properly”.
•  “By combining your innovation potential with that of selected key suppliers, you can deliver your projects more efficiently while sharing the learnings and benefits”.
• “We’re going to share information and work together to bring about a change that benefits us both. A win-win all around”