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Kraft Foods Builds Supplier Relationship Management
Bridge
By: Global Logistics & Supply Chain Strategies |

The Future of Supply-Chain
Talent
When it comes to securing supply-chain talent,
the needs of global companies are changing
dramatically. Experts discuss the capabilities
and training that tomorrow's professionals will
have to possess, in order to meet new
challenges driven by increasing complexity,
heightened customer demands and the
emergence of the omnichannel. A
SupplyChainBrain "In the Know"
presentation. [Run Time (Min.): 14:33]
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In 2004, Kraft Foods embarked upon a sustainable growth plan to turn the
company into a more focused, nimble and cost-effective global competitor.
Part of this plan included a new supplier relationship management (SRM)
"bridge" within Kraft's global procurement organization. Although the term
SRM is used to refer to anything from spend management to supply base
monitoring, Kraft defines SRM as a bridge that connects Kraft and its
suppliers, enabling them to elevate the value derived from the relationship
to new heights, while avoiding the common pitfalls of the buyer-supplier
relationship. The SRM bridge requires the entire Kraft organization to view its selected
suppliers as partners in the company's success. There have been three pillars to Kraft's SRM
bridge:

Resources 1. Determining the optimal relationship: Kraft uses a supplier portfolio management process
by which senior management, procurement and other managers ensure that supplier assets,
Executive Report: The Case capabilities, and expertise are leveraged to support Kraft's strategic business goals. An
for Mobility : "elevating supplier value" steering team advanced a new legal and business framework for
The ubiquitous nature of mobile
devices can seemingly diminish governing key supplier engagements in a manner that supports the broader sharing of
thei... intellectual property, as well as providing a balance of reward and cost-competitiveness,
between Kraft and its suppliers. Kraft also set up a SRM Center of Expertise that promotes
Developing data integration cultural change at Kraft to speed up adoption of the SRM bridge. Kraft's definition of SRM
and lifecycle management
states that there is an optimal type of relationship for each supplier, and Kraft uses a tool
strategy for a hybrid
environment: called relationship segmentation assessment (RSA) to define each relationship based on 10
Cloud- based data presents a wealth factors divided into two categories: (1) the means by which financial value can be generated
of potential information for or...
from the relationship, and (2) the degree to which Kraft and the supplier organization fit
across strategic, geographic, cultural and other dimensions.
Business Process
Management:
Best practices for integrating BPM 2. Developing the optimal relationship: For each selected supplier the Center of Expertise
with Anypoint Platform Business...
establishes a standard set of roles, responsibilities, and decision making and issue resolution
accountabilities called a governance structure. The challenge was to establish clearly defined
Resources
roles that would produce results without changing reporting lines or organizational structure.
The governance structures have avoided disrupting business and damaging the relationship by
Executive Report: The Case
establishing joint procedures to resolve issues. The governance framework requires Kraft and
for Mobility :
The ubiquitous nature of mobile the supplier to assign an individual to champion the alliance. A steering committee of senior
devices can seemingly diminish leaders directs the strategic focus of the alliance and provides business area support on all
thei...
initiatives. A senior executive from both Kraft and the supplier are appointed to oversee and
champion the alliance relationship. The SRM bridge includes joint business planning to identify
Developing data integration
and lifecycle management breakthrough opportunities that will drive strategic benefits to both companies, as well as a
strategy for a hybrid formal way to capture and act on ideas and opportunities which may have previously lay
environment: dormant.
Cloud- based data presents a wealth
of potential information for or...

Business Process
Management:
Best practices for integrating BPM
with Anypoint Platform Business...
3.Maintaining the optimal relationship: To help suppliers grow their business with Kraft, the
company has created "structured ideation" to match supplier capabilities with existing
business needs and priorities. Executives throughout the company specify business needs and
opportunity areas to be targeted using a common format that provides clear requirements to
suppliers. All solutions are showcased to relevant senior executives who are held to a strict
deadline for go/no-go decisions to suppliers. Finally, Kraft uses a value and performance
monitoring process to track supplier portfolio performance in a way that supports continuous
improvement of supplier relationships and drives creation of new value. Besides tracking
traditional KPIs, the process monitors performance indicators in these four critical realms:
operational performance, relationship quality, strategic value and financial value. The process
provides Kraft's global organization with supplier performance data on a regular basis,
allowing for more in-depth analysis of individual supplier performance as well as comparative
analyses across suppliers.

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