Sustainable Supplier Development

The challenge: A transparent supply base that delivers more value

The selection of the right suppliers and partners, their integration into the value chain and managing opportunities as well as risks are one of the greatest challenges for companies today. The decisions you make regarding your supply base determine how flexible and responsive your company will be. Responsiveness, flexibility and sustainability will only be achieved where suppliers become partners in value creation. This requires to embed them into strategies, processes and performance measurement..

The solution: Transparent mutual value creation through multistakeholder relationship management

The supply base of most companies today span multiple tiers of suppliers and add up easily to many thousand suppliers. Transparency and trust are essential to build mutually beneficial relationships and to increase competitiveness. While governance and sustainable procurement approaches often only focus on the transactional aspects of the supplier relationship, our multistakeholder management approach is focused on using the relationship acspects to create more value and lasting company success:

1. Focus on partnerships: Companies that operate globally, are part of supply networks, where it is not always clear who is really ‘conducting the orchestra’. In a time of interdependencies, it is paramount to engage into close relationships with a selected number of true partners.

2. Select the right partners: In an accelerated world of competition, the understanding of suppliers has developed significantly over the recent years. While a lot of suppliers will still remain transactional with focus on quality, cost and delivery there is a new class of suppliers that becomes critical for competitiveness: The selected few strategic partners. Identifying the right partners is not an easy task, as various decision elements need to be considered for fruitful relationships. Once engaged the scope of strategic partnerships go way beyond the transactional and compliance aspects and might include joint innovation labs, joint ventures, and supplier development.

3 – Engage internally and externally to make partnerships work: The most critical aspect of supplier relationship or multistakeholder management is building the internal and external mechanisms that build the required trust to get the most out of the relationships. This is a process that required the right frameworks, processes and incentives.

We have helped many companies to get more value out of their supply base. With our ENGAGE framework we cover all required elements to help you to create economic, ecologic and societal value

Michael D’heur
Strategy | Product Development | Supply Chain | Sustainability