Lloyds

Lloyds

Lloyds puts people at the centre of SRM

Many consider SRM a speciality within procurement, but to the Lloyds Banking Group, it is much more. The financial services firm, which serves 30 million customers and employs 75,000 staff, drives SRM through its divisions, with single points of accountability for around 1,200 managed supplier relationships.
 
The approach puts SRM in the hands of those who best understand the suppliers’ goods and services. The company has been considering how it ensures that its colleagues have the right capabilities, what learning they might need to undertake, and how to keep their skills up to date as business needs change.
 
Lloyds Banking Group has been answering these questions with a capability assessment and learning programme for colleagues involved with SRM, in an organisation-wide project created with the help of State of Flux. It is not the most common approach. State of Flux research from 2019 shows only 17% of organisations have carried out skills and capability assessments to understand what skills they will need while only 46% of firms have invested in SRM training.
 
Pauline Sears, Lloyds Banking Group senior manager, supplier management strategy and centre of excellence, says: “We have a central team in Lloyds Banking Group, who strive to continuously improve the Group’s SRM framework, and who are previous SRM practitioners themselves. A strong SRM community has been established right across the Group for a number of years with a network that covers executives and practitioners. This has been a key
enabler for collaboration in shaping the design, delivery and embedding of change, drawing on a wide variety of business needs and experiences.”
 
Supporting the SRM community 
Divisional executives are appointed with accountability for SRM for the suppliers that they own and each executive is supported by a lead divisional SRM practitioner. Together they drive and oversee how SRM is achieved within their divisions with support and challenge from the centre. This is supplemented by a wider community network which is open to all who have an interest in supplier management including supplier managers and risk partners. “We work together to share our experiences and practices to help drive continuous improvement,” Sears says. We want to ensure that SRM is recognised across our organisation as a skilled profession and provide a structured career path for our colleagues to achieve their full potential.”
 
Capability assessment
But to support SRM, the company needs to know the level of capability which already exists in its SRM community. Working with State of Flux, it has conducted a capability diagnostic which will help focus its learning and assist line managers in developing individuals. It measures fifteen capabilities in an online situational questionnaire and helps individuals rate their own capability. It offers an analysis of their strengths, and any gaps in their capability, which allows managers to open up a conversation about the tailored learning opportunities that individuals
might need.
 
“This is so important to us because there isn’t a one size fits all approach. The diagnostic has been invaluable in highlighting thematic strengths and gaps as well as unique results for each individual. What we’re doing with State of Flux covers a broad spectrum of our entire supplier management community.”
 
The review has also assessed and refreshed the company’s dedicated supplier management “job family” so that it remains fit for current and future needs for the supplier management community, helping to recruit for those roles and support colleagues with structured career paths. The capabilities include supplier performance, contract and risk management as well as building strong relationships and identifying opportunities for improvement and innovation.
 

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Training for the future

As well as defining roles, and helping recruitment, the diagnostics are feeding into a broader learning curriculum which includes company specific knowledge, for around 300 employees involved in supplier management. Those who demonstrate the requisite level of capabilities will be offered the opportunity to achieve external accreditation in SRM. A desire to increase value and manage risk in the supply chains provides the main business driver for developing SRM skills at Lloyds Banking Group.
 
“Being in financial services, we need to make sure we understand which of our suppliers are critical to our organisation and have a robust control framework, which includes SRM. Ultimately, we need to know we can sustain customers’ trust in us via the products and services we provide. The risk landscape continues to evolve, so we need to constantly challenge ourselves, as do our suppliers and adapt to ensure the resilience of our supply chains.
“We passionately believe that effective SRM is pivotal to our success in proactive risk mitigation. Lloyds Banking Group has a diverse and complex supply base so this is about ensuring that SRM is recognised as a skilled profession and that we can retain and attract talent,” Sears says. With the industry-wide challenge of more effectively managing third party risk, the early signs are that Lloyd’s people-led approach to supply chain management could well catch on.
 

Eyes on innovation

Meanwhile, as consumer and business customers adopt new channels and digital services, the Lloyds Banking Group requires innovation from its suppliers to meet these ever-changing demands. “We are concerned with value, both in terms of suppliers delivering to the contract, but increasingly we are looking at those suppliers where innovation and creation of long-term value are important to us,” Sears says.
 
Our intent is to embed this approach as a sustainable part of our ongoing SRM programme and make sure that when new employees come on board, they are able to take advantage of the diagnostic and structured learning programme which we expect to continue to evolve,” Sears says. For Lloyds Banking Group, SRM is vital in managing risk, increasing value through continuous improvement and accelerating innovation. It is laying the foundations for success in these challenges by understanding and developing SRM skills across the whole business.
Lloyds Banking Group is focused on keeping pace with an ever changing and complex threat landscape in its management of third-party risk whilst seeking to increase value in its supply chains for its customers. A people-first approach to SRM is helping it rise to the challenge.

For further information on how we can help your organisation SRM programme, please contact us at enquiries@stateofflux.co.uk and to find out more about State of Flux technology, request a demo here. 

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