This is an example of how you can make use of a business plan (or development plan) with your key suppliers. The business plan is created in MS Word and requires about three pages. Read more about supplier business plan in the SRM 4-Step Process.
I have used this very format in my collaboration with several suppliers. The benefit of using Word-format is basically that you have all information collected in one place and it’s easily readable in one flow. It’s fast to update and makes a great tool for communication to internal stakeholders as well as to the persons closely involved in the SRM program with the supplier.
Content of page 1:
Time period covered (agreed) is stated in the headline and when the common document was latest updated. General information about the supplier and the company’s capabilities are followed by a list of persons from both companies who are extensively involved in the relationship. The page ends with a short update of the supplier’s industry situation. Image of page 1 below:
Content of page 2:
List of key trends (technology/customer needs/etc) of the market that is relevant for both the supplier and the buying company. In relation to the industry situation and market trends, you should list the competitive advantages of the supplier. The analysis of the suppliers’ competitiveness goes deeper through the 6 competitive questions (invented by GE / Jack Welsh). Below each point, state 1-3 points. The idea is to consider these relevant points when setting the action plan that will make “your and your supplier’s common supply-chain more competitive, beating competing supply-chains” (i.e. be better than your competitors and their suppliers). Image of page 2 below:
Content of page 3:
This page is the heart of the Business Plan, with a list of all KPI’s or Targets that are agreed between your buying company and the supplier. In this case, the plan reaches 3 years into the future, but you may choose another time horizon, for example 5 years, depending on your industry situation and business needs. The table is used as tracking tool and historical performance is stated (preferably compared to the agreed targets in order to see eventual gaps to targets). Please read the SRM 4-Step process in order to learn more about target setting and measuring supplier performance. The most important part of the document is the Action Plan – here you list all activities and projects that are ongoing or should be implemented by the supplier (or executed jointly by the supplier and the buying company). The list of prioritized actions are used as tracker tool and should be updated and communicated after each business/projects review meeting. The last piece of the Business Plan is alignment with stakeholders and top management. Tick the boxes when you have got their acknowledgement of the documentation of the established SRM program. Image of page 3 below:
See also the Supplier Development Plan (SRM program documentation using Powerpoint format).