Supplier experience management (SXM) forms a critical part of the supplier relationship management (SRM) process and includes any interaction between the vendor and the buyer.
The ultimate goal of SXM activity is mutual benefit through the supplier/buyer relationship.
In order the best facilitate this benefit the buyer should move away from viewing suppliers as metrics and KPIs and instead work with them as business partners and collaborators. This mindset change helps improve the long-term impact of the supplier relationship an importance which was highlighted by the onset of COVID in 2020.
SXM does not always mean supplier experiences are the same, different supplier groups often have different experiences. It is always the aim for a supplier’s experience to be good, and within this a balance must be made between the use of AI and automation and human involved tasks.
HICX propose that there are two core pillars of consideration for changing a business mindset regarding SXM, they are culture and technological. The cultural aspect has a direct impact on the technological framework so must be considered first as technological change often comes as the result of a culture shift. Culture shifts starts at the top so company leadership need to be focussed on the purpose of the change. Costas Xyloyiannis, CEO at HICX, highlights the culture needs to shift to a ‘supplier centric’ focus where all suppliers have access to a ‘one-to-one relationship’ where the experience can be nurtured to ensure maximum value can be achieved from the relationship.
“I would say change definitely begins at the top. Once senior management is focused and once the purpose is clear that we want to go for a comprehensive supplier experience, rather than just a transaction-focused experience.”
Ramit Mahajan, Head of Supply Chain at Henkel
One of the core elements of the SXM philosophy shared by HICX is that improved supplier experiences create better data and better data creates better experiences ending in a positive cycle coined as the ‘experience data flywheel’. For supplier data to remain in date and useful to the company, the suppliers need to be engaged to the extent they are keeping their information and data refreshed whenever it needs to be; a positive experience helps motivate this action.
SXM has further benefits outside of data and supplier relationships, it can have a significant impact on corporate ESG initiatives. By establishing an environment where suppliers can share their ESG information easily and in a central location where buyers can monitor their inputs ESG tracking related to supplier becomes much easier and more transparent improving the buying organisation’s ESG objective tracking and adherence.