The Next Stage of Procurement’s Evolution: Effective Supplier Relationship Management (SRM)
The appetite for implementing effective Supplier Relationship Management (SRM) systems in large and mid-sized organizations has been increasing in recent years. With many having implemented systems to give them strategic sourcing and to bring purchasing under control, SRM is moving to the top of the procurement agenda as the next logical step to deliver organisation-wide best practice.
In fact, a movement towards SRM adoption has been highlighted in a recent PwC study - ‘Supplier Relationship Management’: How key suppliers drive your company’s competitive advantage’ highlighting how SRM can add value in reducing supply risk exposure, leveraging supplier capabilities and driving cost savings.
But what makes for good SRM?
The starting point for defining good SRM is seeing interactions with suppliers not as discrete and independent – but as being the parts of an overall relationship, managed in a coordinated fashion across the organisation, and throughout the relationship lifecycle.
In practice though these interactions are typically managed in a non-standardized way, across disparate people, information, systems and processes. So for procurement teams the challenge has always been to find a way to overcome these obstacles to deliver a holistic, accurate view of each supplier relationship.
This is where good SRM comes into play. By developing and implementing a program with clear processes, and using technology as the enabler, an organisation can start driving more value from its supplier relationships to deliver some real tangible benefits:
- Managing and identifying supply chain risk
- Improving supplier performance
- Improving communication, trust and goodwill with suppliers
- Ensuring adherence to company compliance policy
- Improving spend transparency across the business
However, with an absence of technologies and tools in place to manage supplier interactions many businesses experience roadblocks on their SRM journey, and we often hear about cases where business reputations, and ultimately bottom lines, have taken a nose dive due too poor SRM practice.
If you would like to become more efficient by automating and enhancing your existing processes, or would simply like to talk about how to embark on your SRM journey, they why not download our SRM Guide or contact us via our contact form.
