Designing a supplier management framework and supporting operating model

Landscape

This ‘challenger bank’ is one of the largest, with a fast-growing customer-base and complexities driven principally by growth.

Challenge

The CPO was new in post and announced a wide-ranging commercial transformation to the executive team. The program would focus on modernizing the approach to procurement and supplier management, looking into all aspects of the operation.

The existing supplier management model was outdated, and the discipline itself was undervalued within the business. While a program existed, it was highly risk centric, focussing on ~300 suppliers with little or no differentiation applied to the different types of suppliers and the services they provided. Compliance to standards was low and open to interpretation at a Business Unit level, creating a highly manual and fragmented approach and no enterprise-wide visibility.

Our Approach

Proxima worked closely with the head of the Assurance function to conduct a rapid diagnostic to assess the pre-existing Supplier Management Framework (SMF) and understand future aspirations. We then looked into internal and external compliance, processes, reporting, and data. This gave us strong insights into the current situation and likely challenges to delivering and operationalizing a new fit for purpose SMF.

Following the assessment, we designed a new SMF, supporting tools, operating model design, and change plan supporting our client from design through implementation.

Outcomes and Deliverables

The new SMF was designed around best practices in Financial Services. By using the Proxima toolkit, we were able to work closely and quickly with the leadership, creating a tailored set of activities for the bank and an easy to use segmentation tool for assessing new or pre-existing suppliers. The segmentation would enable Sourcing or Supplier Management to quickly understand the supplier classification and the in-life management approach and effort.

In designing the SMF around risk, performance, and value, we were able to create a more balanced and thoughtful approach to different types of suppliers. Moving from a pure risk focused model allowed the bank to also identify and manage suppliers according to critical delivery commitments and the potential to collaborate and innovate.

Finally, we designed a set of enterprise level dashboards that would report key supplier data, and highlight noncompliance to the SMF either internally or externally. The data collection was technology enabled, allowing suppliers and stakeholders input data into a central system with real time calculations calibrating outcomes. This automated approach supported the creation of a lean operating model.

  • > 1k suppliers in the program scope and > 300 segmented
  • 32 business controls identified and deployed through segmentation
  • 30 executive level dashboard reports selected and deployed

Resources

Related articles