Traditional strategic sourcing initiatives typically have
just one winner: you. In a zero-sum game, you had to beat up,
squeeze out and otherwise take advantage of suppliers to get
them closer to zero and you closer to the sum. Shifting the
focus from cost-cutting to value creation means that for some
supplier relationships, that dynamic is going to change. The
previous section identified how you can choose the best
direction for collaboration, but if you’re only thinking about
your own benefits, then you’re not collaborating. The key is
identifying win-win situations for you and your suppliers.
Call it a mutual value opportunity. Estimating these opportunities starts by using internal collaboration to complete a
value-screening process, which takes the following steps:
• Develop a relationship baseline. Profile your existing relationship with the supplier. This will include its
business structure, products and offerings, recent business
performance, competitive position, strategic direction, joint
commercial flows and other relationship dimensions (such
as innovation and joint ventures), relative relationship
power, and, importantly, how its culture aligns with yours.
• Identify initial value hypotheses. What are the potential opportunities and what type and level of value do they
bring to both you and the supplier?
• Align with internal partners. Vet and prioritize part-
nership opportunities with internal stakeholders by assess-
ing their value to the organization.
Turning Supplier Collaboration into a
“Sure, we collaborate with suppliers,” you may be saying.
“My CPO was just telling me a story last week.” . . . Indeed,
many companies have examples of successful supplier collaboration, but often these are mere anecdotes—one-time
success stories derived from unique circumstances or even
freak accidents—not the results of a structured approach to
identifying opportunities. To systematically drive strategic
value creation, your procurement organization needs to develop a key competency in supplier collaboration.
Fortunately, many of the competencies developed for
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