TON Takes A Look At Supplier Relationship Management

April 5, 2017

We had a truly great program at Mærsk on Thursday, March 23. William Menzel, Head of Supplier Relationship Management, Mærsk Line, outdid himself pulling in valuable contributors with valuable input on our topic of Supplier Relationship Management (SRM).


Michael Mol, Professor, CBS, kicked off our program with our Red Thread for the day. Central to his message is that there are essentially two key levers that can be pulled in any supplier relationship: 1) Trust: As in I can work WITH you; and 2) Power: As in you will work FOR me. The first is driven by the idea that together we can grow the size of the “pie.” The second is that we are determining the split of the “pie.” The key in Supplier Relationship Management therefore is to determine when and how to use each lever.


Jan Esbech, Head of Global Marine & Inland, Mærsk Line, then welcomed our network to Mærsk and gave us a detailed look at Mærsk, the current state of the shipping industry, and the context in which its work with Supplier Relationship Management exists. In tandem with the new focus on collaboration across the Mærsk Group, Mærsk Line also needs to be able to define and extract value from its external relationships. Critical to this effort, is knowing which relationships are actually worth it.


William Menzel took to the floor to give us a deep dive into Strategic Supplier Relationship Management on a Global Scale, including the challenges and roadblocks that they have experienced implementing it. Mærsk Line sees the true value of SRM being a better relationship, fewer escalations, better unit cost, and increased productivity.  Unequivocally part of the picture is Mærsk’s size. Their supplier spend alone is billions of USD. William noted several challenges in realising successful SRM such as the lack of overview and tools to properly support SRM and that the organisation often didn’t leverage (or aggregate) its global presence in various vendor relationships.


After lunch, Michael Jarnum, Commercial Excellence Advisor, Commerzial, focused our discussions on accelerating trust and relationships. Key to Michael’s message is that trust can not just be conjured up. It is critical to deliberately build it up over time through personal interactions.  But why should we? Michael points out that with increased trust comes more flexibility, easier problem resolution, a lowering of risk, and a way to prioritise differently; all of which contribute to value creation. According to Michael, trustworthiness equals credibility plus reliability plus intimacy divided by self orientation.


Our final session of the day took a look at supplier performance management. Martin Wiese, Director, PPG Industries, challenged our network to really examine the ways in which we monitor and measure supplier performance. For instance, are we calculating the cost of complaints? Do we measure business impact? Which is most important: cost or performance? And do we align targets based on that choice? Martin’s central message is that we all need to pick our battles and then measure accordingly.


Our day together concluded with a bit of liquid networking once the formal program ended: A great way to speak a bit more informally about building relationships and trust.


We look forward to our next TON program: May 18 at Danske Bank, Holmens Kanal. We will take a look at how we can strike a balance between commitment and flexibility. We hope to see you there.