Spend Matters believes that in 2010 transparency — not simply compliance management or supplier on-boarding — will begin to rule the supplier management focus. In recent years, many organizations have begun their supplier information management journey by attempting to solve singule issues, often in response to a particular regulatory, customer, or market demand. In some cases, these investments have allowed procurement organizations and the the business areas they represent to check the box on meeting standards requirements (e.g., RoHS in high tech, CFR requirements for traceability in medical devices, etc). Others have gone slightly further, providing new capabilities that actually improve business performance (e.g., supplier on-boarding systems that enable companies to bring more spend under management faster). In nearly all cases, the desired result has been a specific goal rather than a broader level of transparency between the buying organization and its supply chain (potentially multiple tiers).
Spend Matters believes that, starting in 2010, we’ll see leading procurement and supply chain organizations start to focus on building broader transparency into their supply base, not only to solve immediate requirements but also to stay flexible and nimble, the better to manage future requirements and to react to changes in the market. In this regard, companies will focus on transparency as a means to both current (and necessary) realized ends as well as future, potentially unknown ones, such as the need to rapidly implement and effect a successful supplier development effort in response to a crisis (e.g., quality failure, adulterated ingredients/parts, child-labor violation, etc.) In some cases, they’ll rely on suppliers to partially or fully offset the costs of these programs by requiring a registration and/or annual fee. Our research suggests that there is significant polarization among organizations about whether to have suppliers offset transparency-program costs (or, in some cases, to make such programs a profit center)…
