Transforming Supplier Relations: Evolving SRM to SXM

In today's rapidly evolving business landscape, the traditional approach to Supplier Relationship Management (SRM) no longer suffices.

Historically, SRM has focused on nurturing relationships with a select few strategic suppliers, often neglecting the broader supplier base. However, businesses are now recognizing the need to engage with all of them, irrespective of size or strategic importance.

To thrive in a competitive market, companies must prioritise fostering positive interactions with 100% of their suppliers. This shift in mindset marks the evolution from SRM to Supplier Experience Management (SXM), where the emphasis is on delivering an exceptional experience for every supplier.

At its core, SXM revolves around the concept of making it easy and enjoyable for suppliers to collaborate with the company. This involves streamlining processes, providing clear communication channels, and offering support tailored to the diverse needs of suppliers. By prioritising supplier experience, businesses can unlock significant competitive advantages.

How HICX Focuses on all suppliers

This philosophy has been at the heart of HICX. Back in the early 2000s, HICX’s CEO and co-founder, Costas Xyloyiannis, started the company as a young software engineering graduate. At the time, a major pharmaceutical company needed to report sustainability numbers but the CPO had no idea who all his suppliers were, let alone how sustainable they were. Costas built him a program to determine this information. The project was a success, inspiring him to continue finding solutions to supplier data issues, and HICX was born.

Twenty years on, HICX and the product have continued to develop and now meet the modern supplier management needs of some of the world’s largest manufacturers, such as Unilever, Heineken, and Mondelez.

Costas emphasises the importance of redefining supplier relationships in the context of evolving business landscapes. In the quest for supply chain resilience, organisations are reassessing their interactions with suppliers and uncovering significant challenges.

Why SXM is better for all

SRM has been the go-to approach, focusing on a select group of strategic suppliers. However, this model often falls short in execution, favouring performance metrics over genuine relationship-building. Moreover, it typically only applies to a small fraction of suppliers, leaving the majority to grapple with persistent issues like late payments and unclear processes.

SXM advocates for a holistic approach, ensuring a positive experience for all suppliers, regardless of strategic importance. This entails understanding and addressing supplier friction points, fostering mutual success, and establishing a culture of partnership.

Key to successful SXM implementation is the adoption of a single source of truth in supplier data and the customization of interactions based on supplier needs. Procurement leaders play a crucial role in driving this cultural and technological transformation, leveraging their insights into the supply chain landscape.

In a landscape of uncertainty, SXM presents a compelling opportunity for organisations to cultivate robust relationships with all suppliers, thereby enhancing supply chain resilience and ensuring long-term success.

HICX Supplier Experience Survey

HICX surveyed 100 senior procurement professionals from leading organisations to assess their vision for the procurement function and its current status. 

It found that organisations neglect supply chain relationship management, focusing more on cash generation. The absence of ownership over the supplier experience exacerbates these issues. 

HICX identifies six critical obstacles to SXM, emphasising the importance of improving data management, enhancing interdepartmental communication, and addressing regional/local requirements to remain competitive.

How leaders can reshape relations 

Procurement leaders play a pivotal role in driving this transformation. By championing SXM initiatives within their organisations, they can empower all suppliers to deliver their best work. 

This not only enhances operational efficiency but also strengthens relationships across the supply chain, fostering a culture of collaboration and innovation.

Furthermore, embracing SXM enables businesses to differentiate themselves in the marketplace. Suppliers are more likely to prioritise partnerships with companies that value their contributions and prioritise their experience. 

As a result, businesses can attract top-tier talent, secure preferential pricing, and gain access to innovative solutions that drive growth and profitability.

In summary, the evolution from SRM to SXM represents a paradigm shift in how businesses approach supplier relationships. 

By prioritising supplier experience and extending support to all suppliers, companies can gain a competitive edge in today's dynamic market landscape. 

Procurement leaders have a unique opportunity to lead this transformation and position their organisations for long-term success.

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