Supplier Engagement with Data
The Perfect Storm
KPI’s, metrics, board reporting, it all used to fill me with dread. Back in the late 1990s I remember sitting through training on balanced scorecards , with the aim of trying to find a way to connect the desire of my then executive team’s strategic reporting requirements with the data we held within our business.
As I reflect today on some of the most amusing meetings that I’ve ever been privy to, I can still feel a bit of a shiver down my spine over 30 years later. Dear reader, this makes me feel old. But did I gain wisdom with age?
Quite possibly, and that’s the subject of my article today, sharing some of this wisdom! I’ve had the privilege of working with data the whole of my career. My early work post-graduation was in systems management for a small UK based Pharmaceutical company. I started off “helping” in IT, but rapidly rose to a position managing systems and business applications. The company was going through change, a management buyout, a requirement to rip and replace finance, distribution and manufacturing systems, and an urgency to improve sales practices with some newfangled Customer Relationship Management system. Please remember that back in the '90s organisations were still using fan-fold printers and green screen terminals. At one point we had admin staff re-keying data from print outs into Lotus 123 spreadsheets before Microsoft Excel was a “thing”.
On reflection it was the perfect storm and opportunity for my career development. At the time, it felt like I was always a bit behind the 8-ball, putting out fires, solving brand new problems never encountered before, and this was before the ultimate farce of the Years 2000 Millennium bug that caused sleepless nights, as all systems we ran were allegedly doomed come the turn of the Century, ultimately a storm in a tea cup.
On my journey I fell in love. Don’t worry, I’m not about to get emotional about ERP or MRP2 systems, although you can’t beat a bit of finite capacity planning with drag-and-drop Gannt Charts! No, for me it was what you layer on top of your ERP and your CRM. I fell in love with data and the wonderful world of “reporting”. To start the ball rolling my team was developing FoxPro databases on top of AS/400 systems with ODBC drivers you installed from floppy disk. But fast forward a few years and Crystal Reports was the bees-knees, and a new acronym came into my life, and that was OLAP. A way to pre-aggregate and calculate business data in slow (now, but not at the time) on-premise SQL databases so that business people could report on anything, any way they wanted.
Data Literacy is a topic for another day, but the gaps between what people thought they wanted, what they were capable of understanding, and what the early Business Intelligence systems were capable of were huge. As I type on this day in 2024, I still believe that Data Literacy is the largest barrier.
I think you know by this briefest of introductions that I could write another 100,000 words on the journey from “there” to “here”, but I won’t put you through that pain.
I’m going to cut to the chase, although the story flits briefly back in time to the 1970s. An engineer called John Doerr first institutionalised a simple “measurement” tool called OKR, a method developed by a revolutionary leader at Intel, Andy Grove. If you want to learn more about this then I highly recommend visiting www.whatmatters.com and acquiring a copy of Doerr’s book, entitled “Measure What Matters”. Suffice to say, Larry Page of Alphabet/Google fame says that Doerr’s OKR programme “helped lead us to 10x growth, many times over”, and helped to make their mission of “organising the worlds information” achievable.
Ideas Are Easy. Execution Is Everything
Your business already runs well, I’m sure of it. If it’s been around for more than 10 years, then things are going well. Most don’t make it that far, few beyond 30 years. What does “going well” mean for you?
For me it’s about business process excellence, about great people, and about culture. Your organisation is a living breathing entity, all parts are operational, success has been evolutionary, and leadership have effectively navigated your market with their strategy, and most likely a clear and unwavering mission.
The lifeblood of a modern business is data. It always has been if we are honest with ourselves. It was more traumatic to obtain and analyse in the past, but as tooling has modernised over the years, the business world is overflowing with data.
Not being able to access data easily in the past is arguably no worse than having immediate access to data now, yet not harnessing it effectively. From my perspective, as a life-long data junkie, data without purpose is akin to a great idea not executed.
Data Driven Culture
It’s safe to say at this juncture that your in-house systems and the data running through them just “works”. Your finance, sales, distribution, manufacturing systems are fine. Your CRM systems integrate well, you can manage the processes from quote to cash without even thinking. You are digitally mature with the nuts and bolts, but are you a data driven company?
Forward thinking organisations today recognise the value of data and embed it into every decision, interaction, and process. In mature organisations, data is treated as a valuable product “in its own right”. It is typically processed and delivered in real time, and it enables better decision making, automates many routine activities, and often is a key driver in business culture. We at Catalyst have a simple mission: “Bring People and Data Together”.
Supplier Interactions
After over a decade of working inside some of the UKs best run companies, both SMB and Enterprise, we at Catalyst continue to see less mature data practices in the supply chain. There is typically very limited data integration, and companies struggle to integrate supplier data effectively. Siloed information really hinders holistic actionable insights.
Some supplier interactions are proactive, but typically aligned to procedural methods that are by design forward looking, such as meeting to review, then refine, define and shape the following years targets, forecasts, rebates and the like.
Most are reactive when it comes to decision making within time horizons such as now, tomorrow, next week or next month. In many sectors, this is so reactive that business relies on the traditional approach of a meeting or a phone call to troubleshoot and resolve issues. Manual handling of supplier related tasks prevails, slowing down operations and killing creativity and agility along the way, all of which costs time and money.
Focus On Balanced Transformation
Before we move onto the “how” and the “what”, the summary so far is "lead with data", treat data as a product, embrace data-driven practices and elevate ecosystem engagement and interactions. Try and keep the following three ideas front of mind as you attempt to embrace your supply chain with data transformation projects.
Strategic Focus: Organisations that prioritise customer engagement and data exploitation gain a competitive edge.
Supplier Transformation: Non-best of breed companies should invest in data maturity to enhance supplier interactions.
Balancing Both: Striking a balance between customer-centricity and supplier relationships is crucial for overall success.
Show Me The Numbers!
OK, so now we have the foundational thinking out of the way, what should you be measuring?
Right now, you are likely already looking outward to your suppliers and measuring their performance characteristics impacting your business. Here is an example short list of some of the metrics you may already be using, derived from your internal data-based systems and reporting tools:
Quality
Delivery
Financial
Inventory
Beyond the basics, you may also have metrics such as:
ESG – Sustainability and Compliance
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Responsiveness
And for the more advanced organisations, there are more strategic metrics such as:
Innovation
Relationship
These are all great indicators, and I am sure I am preaching to the converted, but most of these are lagging not leading metrics, and almost all are operational. Remember though that all of these metrics for success are yours, about you, except for the final Innovation and Relationship criteria.
It Takes Two To Tango!
There is no rocket science in this article, in fact we are not even stretching our minds to encompass data science at this stage, but we should spend a little time putting ourselves in the shoes of your suppliers. Pick one, maybe your favourite one, and imagine you are them.
They possibly transact a significant amount of business with you each year, maybe to them you are their biggest customer. They have half a dozen meetings with you each year, to see how business is going against target, to ensure things are on track with rebate processing. Potentially a round of golf and a black-tie event later in the year. You know their children’s names and that they prefer a beer over a wine. Business is OK, the strength in the human relationship keeps things ticking along nicely. In fact, you both believe you can probably do another 10% next year if things look good, and the next budget doesn’t scupper plans.
Business one year to the next may go from good, through great, back to challenging, through “difficult economic climate”, but the business relationship is driven primarily through human interactions over many, many years.
Yet back in the office, you have access to the kind of data, reporting and metrics we have already outlined, and you know that this helps you, your team and your leadership make more informed decisions that drive performance.
Back in the shoes of your supplier again, imagine how much MORE business they could transact through you if they had access to sales, stock and financial data relating to their business inside of yours?
Benefits To Your Supplier
As a supplier, envisioning a world where your customer shares real-time sales, stock, and financial data with you is the holy grail. It’s now worth exploring the top things you could leverage from this data collaboration to make informed decisions and foster mutual growth.
For companies that already do this, and have achieved this with Catalyst and Coeus Portal technologies, we see a gentle, yet genuine transition from access to data, through acceptance of value, on to proactive behaviour where the business can be driven from the use of this data.
At Wickes, for example, one technique used to great effect at quite an early stage in the roll out of their supplier portal was a new requirement for their complete supply chain. From the next quarterly business meeting onwards, suppliers would come to the meetings armed with actions and insights taken from the data they now had access to, stimulating portal access and uptake, and the Wickes Category managers would not prepare sales or stock type reporting prior to meeting.
Wickes had unwavering confidence in the accuracy of their data. The insights shared by the suppliers’ commercial teams during each meeting were firmly grounded on a bedrock of reliable, collaborative, and precise data. This pinnacle of achievement was reached within a remarkably short span of time, and since then, they have never wavered. A simple behavioural science change and a data-driven approach, which resulted in both significant business growth and enhanced supplier relationships.
Let’s get this story back on track and explore the enhanced metrics that will drive your mutual business success once you take the leap of faith and share “your” business data with your suppliers.
Firstly, the suppliers only ever get to see what you want to share with them, within the boundaries of data sharing agreements, GDPR and the like. Secondly, the suppliers of course only see data, insights, analytics and reporting on their SKUs you procured through them.
Top things your suppliers will get from your fully branded Catalyst Supplier Portal are:
Demand Forecasting
Supply Chain Efficiency
Product Performance Insights
Segmentation
Risk Management
Innovation
Always remember that this data collaboration should be a mutually beneficial relationship. Both parties gain value when transparency and trust exist, and our experience of supporting the deployment of the Catalyst Supplier Experience Portal in some of the UKs largest companies highlights these mutual benefits. Over time, as you analyse and act on real-time data, and embrace your suppliers by provisioning such a solution, you will drive growth and strengthen your strategic partnership.
Learn More
To learn more about how both you and your organisation could benefit from enhanced supply chain management and supplier analytics, and do so by deploying a fully branded portal, sharing real-time data at scale, please contact us to arrange a first meeting.