How to Build Stronger Relationships with Your Suppliers?

How is technology helping you to build stronger relationships with your suppliers? What kind of challenges are you facing in regards to this?

We have an array of technological solutions that help streamline and reduce administration with our suppliers through data exchange, as well as by sharing platforms with our business partners. This enhances communication, transparency and speed, while allowing for data traceability and supporting internal governance with a well-structured flow. Moreover, technology plays a key role in sustaining preventive actions through data analytics elaboration, which lets us formulate different scenarios and plan accordingly.

On the other hand, with the surge in interest in digitalisation across functions, it is vital to set clear company priorities in order to optimise resources. At the same time, the full potential of digitalisation has yet to reach to be realised. We believe that an agile cycle of reiterations is the best way to move forward.

We are finding that the different levels of technological readiness among our suppliers must also be taken into account; for many good reasons, it is difficult for all our business partners to move in step as IT accelerates.

Lastly, there is the people element: we need to allow for the rapid shift in mindset that technology requires. For some age groups, this is a radical change. Here we are finding out that a good way to move forward is to mix experienced colleagues with younger people: it is a great opportunity for both to learn from each other.

How is value creation driving innovation within your company?

To super-charge innovation we need, as a company, to be recognised by our suppliers as a “customer-of-choice”.

To earn this recognition, there are different elements in relationships needed to create the right conditions. These we have brought together under our value-based sourcing methodology.

The relationship model we have established with strategic suppliers rests on long-term agreements. This encourages trust and openness, which allows our suppliers to invest in resources and automation. Together, we set development programmes based on knowledge- and competence-sharing where suppliers are involved at the early in the development cycle: at the concept and project initiation phase. This helps us to develop solutions which offer the best possible consumer experiences.

In this virtuous cycle, it is of utmost importance to share the company’s future direction with key suppliers and to make them part of strategic decision-making through a well-structured communication plan.

All this creates a fertile breeding ground for innovation that fosters products, processes and relationships.

How are you using sustainable sourcing to improve brand image and increase revenue?

Electrolux has been a leader in sustainability for over a decade. Sustainability is at the core of the group’s purpose and business model. Our sustainability framework, For the Better, guides us by focusing on three key areas: better solutions, better operations and better society.

We are determined to continually improve in terms of sustainability and to make smarter, more resource-efficient solutions available for everyone. We develop better operations for our co-workers and the communities around us, while striving to always act ethically and to respect human rights. In fact, sustainability is increasingly turning out to be a competitive advantage.

With such a heritage, it is natural for us to transfer our accumulated expertise, and to demand the same focus and commitment from our supplier base.

At the moment, we are further developing a sustainable procurement programme which covers a number of aspects. These range from code of conduct and human right ethics, through lower impact use of resources, to the implementation of recycled materials, for example.

Our ambition is to make sustainability more and more a key element when it comes to making sourcing decisions and building business relationships.

What are the challenges within implementing digital solutions faster?

The effective implementation of digital solutions is linked to two main key success factors: resources and adaptability.

Limited resources and, in some cases, decentralised budgets make it very difficult to develop all solutions at the same time – and to scale them at a global level. We run many successful pilots but only a few see a global roll-out.

Moreover, as mentioned, it is also an adaptability issue: we tend to underestimate the time needed to modify ways of working, behaviours and an approach. In other words, we always need to consider the level of maturity of the organisation for each proposed solution.

However, things are changing: Electrolux has embraced a global approach in order to accelerate the group towards cutting-edge global standards with the aim to further speed up our digital transformation.