Supplier Relationship Management Consulting
 

Supplier Relationship Management Consulting

Source One provides the People, Processes, and Technology to Implement and Improve your Supplier Relationship Management Program

The cost savings benefits of applying Strategic Sourcing principles and processes across all areas of supply chain operations have been well documented and realized across the majority of the Fortune 1000.

Strategic Sourcing projects frequently generate significant cost savings which have a very favorable ROI, considering the low cost required to implement. However, as these gains are realized, it is becoming increasingly difficult for companies today to generate the same level of returns, year over year, by utilizing the same sourcing techniques and tactics. Moreover, research has shown that, as supplier relationships are proactively managed, the initial benefits derived from the Strategic Sourcing efforts are not only maintained, but improved. The opposite is true for those supplier relationships that are loosely managed or benignly neglected by the buying organization.

Companies are also becoming more dependent on a complex supply base. In many cases, key processes and functions have been outsourced and the supply base collapsed due to Strategic Sourcing projects. This complex “virtual organization” type of structure begs for the need to drive performance improvements, manage risk, and efficiently manage supplier relationships. These Supplier Relationship Management (SRM) capabilities are being developed at top companies who are reaping the rewards of their investments. These capabilities include supplier management development, processes, governance mechanisms, and systems to manage suppliers on a day-to-day basis over the supplier life-cycle (onboarding to exit).

Benefits of Supplier Relationship Management (SRM)

Developing a Supplier Relationship Management (SRM) program can be used to solve a number of challenges in today’s complex world which are not addressed via traditional Strategic Sourcing efforts:

Challenge

Value from Sourcing efforts not fully realized

Supplier Risks transferred to Buyer

Unclear post-contract signature roles/processes

Employees are “all managing suppliers,” taking time away from their full-time responsibilities

All suppliers are “treated equally”

Suppliers “managing” the purchasing organization, resulting in an undisciplined buying strategy

Companies fail to communicate with key suppliers regarding strategic issues

Benefit of Supplier Relationship Management

Dedicated supplier managers who ensure suppliers deliver as expected

Improved visibility and transparency into supplier risks with appropriate risk mitigation strategies and controls

Clearly defined roles on both Supplier and Buyer side

Dedicated, trained professionals who can unlock value for the purchasing organization and decrease the overall costs for managing the supplier

Stratification/segmentation of supply base allowing for relationship development with truly strategic suppliers. Faster speed to of supplier capabilities.

Disciplined buying processes resulting in reduced cost of supplier management; reduced sales cycle timeline

Regular executive-level meetings that result in access to new innovative products and technologies, and provide for a competitive advantage in the marketplace

How Can Source One Help?

The first step in creating a Supplier Relationship Management Program is to develop a business case. To do that, Source One focuses on the organization’s most pressing supplier management pain points and challenges, and demonstrates the value of implementing SRM best practices with key suppliers. In developing a business case, organizations must consider the following:

  • Are supplier objectives and performance in line with organizational objectives?
  • Is my SRM software optimized for our company’s long-term SRM vision?
  • Does supplier performance directly correlate in areas that drive the most value for the organization?
  • Are suppliers rewarded for exceptional performance that matter most to the organization? Conversely, are they penalized for poor performance?
  • Is there a clearly defined, common set of processes, policies, and tools governing the on-going, day-to-day management of suppliers?
  • Does the staff that interfaces with suppliers on a day-to-day (or less frequent) basis have the skills to manage suppliers effectively to maximize value?
  • Are strategic suppliers delivering the value expected from top leaders in the organization?
  • Are all suppliers treated equally? If the supply base is segmented, are there clear processes and procedures for managing strategic vs. non-strategic suppliers?
  • Does the organization have the processes in place to develop the capabilities of important suppliesr in order to boost supplier performance, direct supplier investment in new services, gain first access to technologies/innovation, and gain a competitive advantage?

Source One’s experts are skilled in conducting market analyses and developing the best practices your procurement department needs to gain a competitive advantage. As unbiased consultants with decades of experience, we have worked with tens of thousands of suppliers and fully understand what is important to them in a client-supplier relationship. Our experts can work with your procurement team to pass on the knowledge and skills necessary to better your organization’s supplier relationship management program.

Contact Source One’s Supplier Relationship Management Program experts today and find out how to expand your supply chain excellence.

Share this

VENDOR MANAGEMENT SERVICE OFFERINGS

Learn more about Source One’s Supplier Relationship Management Service Offerings.


Staff Augmentation for Supplier Relationship Management
Programs require people to manage them. Source One can help you find the right combination of resources (full-time, part-time, temporary)to run your SRM program.

Staff Augmentation for Vendor Management Programs


Third Party Management Software Sourcing
Are you using the right tools for the right job? Let Source One’s vendor management software experts guide your organization in identifying, securing, and implementing the right software solution for your supplier relationship management program.

Vendor Management Software Sourcing


Supplier Relationship Management Insights
Over our 20+ year history, Source One has helped best-in-class companies institute and maintain supplier relationship management programs. We’re proud to share our insights with you in our SRM White Paper.

Vendor Management Program Insights