Supply + Demand: Digitizing Procurement to Develop a World-Class Supplier Experience
At Stimulus, we believe that a good supplier experience is a core to business success. Developing world-class supplier collaborations and consumer-like supplier experiences are at the forefront of our mission. Hence, our CEO, Tiffanie Stanard took the initiative to speak with the Vice President at JP Morgan Chase (Commercial Banking Division), Shaunté Robinson about digitizing procurement to develop a world-class supplier experience.
Before diving into what “digitizing procurement to develop a world-class supplier experience” means to us, we’d like to define a few terms for easy reference.
- Sourcing: Sourcing is the process of researching, vetting, building relationships with, and eventually contracting suppliers for the inputs that a company needs for its operations. Sourcing is tasked with carrying out research, creating and executing strategy, defining quality and quantity metrics, and choosing suppliers that meet these criteria.
- Procurement: the actual process of acquiring and paying for the goods and services that operations need to satisfy the demand for the finished goods and services that a company must deliver to its customers. Once procurement has occurred, sourcing uses the information generated during the procurement process to perform its vendor assessment and management responsibilities.
Supply Chain Process at JP Morgan
Robinson shared with us the procurement and supplier processes differing in terms of digitization. She mentioned that the supplier process has not always been effectively digitized but this is a process that they have been considering and working towards. She dived deeper into explaining to us the process of supply chain at JP Morgan by breaking it down step by step. We’d love to highlight some of the processes mentioned by Robinson.
- The traditional process is RFP — request for proposal. You go on the website and fill out the RFP form for procurement — for a proposal to work with them. Once the application is reviewed, the team reviews the intakes and makes the decision of whether or not there’s an opportunity in their spending categories. Some of the categories are:
- Professional services like auditing, recruiting, marketing and communications.
- Global real estate, loan services (for collection, property inspection, lending on the mortgage)
- Global security
- Travel and entertainment
2. Based on spend categories the company assesses the current environment and where they can add tier one or tier two suppliers to the program. If there isn’t any opportunity they will let the business know that as well. That’s the part usually missing in other companies/banks. The two categories of responses include “we may not have an opportunity for you in the next 6 months” or “we may not have an opportunity for you in the next 18 months.” By being transparent, JP Morgan achieves building trustful relationships with customers which is vital when providing a world-class supplier experience.
3. If a business receives a call back that an opportunity is present, they are requested to provide additional information. This can be a document highlighting financials or a capability statement. JP Morgan then allocates the business based on timing, size, etc.
The two tiers are described below for your understanding:
- Tier 1 includes the largest kind of spenders and large accounting categories that spend within their companies.
- Tier 2 includes generally smaller contracts. Some of these may start out as a pilot program to assess whether they can officially be a supplier.
The Impact of Supplier Experience
The key to building better relationships in the hopes of providing a world-class supplier experience is communication. From Robinson, we learn that communication is the key aspect of customer satisfaction. If a challenge is communicated earlier on they can reassess, reevaluate and readjust.
Another useful tip that Robinson discusses is to make it a priority to socialize and meet with other folks on the team. She suggests working your way up as much as you can, particularly in the sourcing department or recruitment department at a firm.
The last point of the conversation revolves around JP Morgan’s 30 billion racial equity commitment. Making sure that minority groups have equal opportunities for growth is essential for any business’ success. At JP Morgan, $14 million is dedicated to affordable housing as a part of the racial equity commitment. Moreover, JP Morgan is committed to making the consumer-supplier experience accessible to everyone by taking the following initiatives:
- They have created minority entrepreneur consultants, in 30 different cities, some of the largest and most diverse cities in the country. From startup to $2 million their goal is to mentor and coach.
- They now have an incremental spend of 750 million across the next five years, particularly for black and Latin suppliers.
- They are focused on financial health and literacy so they now have community managers across, 150 of them were hired just in the last 2 years they are in the most diverse cities such as Chicago Harlem Philly.
- The goal is to rebuild trust with their communities. It is important to educate about the value of what your paycheck can do at a financial institution versus some of the alternate sources.
- There are no taxes involved in direct deposit. They are inclusive and give opportunities for diverse employees. They’ve always had resource groups based on ethnicity or interest.
- They talk about first-time homeowner assistants and that’s exactly what they’re doing for employees. They’re holding the managers accountable for making sure that diverse employees are advancing and developing in the firm.
After speaking with Shaunté Robinson, we learned that relationship intelligence is the first step for companies looking to improve their supplier experience. Developing world-class supplier collaboration and consumer-like supplier experiences is a journey that requires research, communication, and distinguishable relationships — all of which contribute to a world-class supplier experience.
Learn more about Supply + Demand: The Real Cost of Doing Business — visit https://www.supplyanddemandevents.com/