Let's Talk about Supplier Relationship Management

Let’s Talk about Supplier Relationship Management

Supplier relationship management, or SRM as it is more commonly called, is the practice of proactively managing suppliers and gaining value from those relationships well beyond the contract signature. SRM is a great way to increase savings, reduce risk, and drive innovation. However, many companies have yet to adopt this practice due to a lack of a support around building a business case. Here are some key points to make when discussing SRM implementation with your stakeholders.

Increases Efficiency

When communication is better, business needs are met faster. SRM opens the path for communication, providing an on-going process to maintain relationships with your critical and strategic suppliers.

Cost Savings

SRM can help reduce the chance of delays by improving processes and addressing quality issues proactively. Not to mention, improved relations with suppliers can often lead to better collaboration, resulting in a supplier who might be more likely to offer cost reductions or new technologies that can impact your bottom line.

Risk Management

SRM helps companies drive compliance with laws and regulations, avoiding financial penalties, security breaches and damage to the brand’s reputation. SRM implements formal processes that control risks, and creates disaster recovery and business continuity strategies.

Suppliers understand their industry best, so why not utilize them when entering new markets? They can provide you with ample market intelligence to spark innovation and increase revenue.

SRM is a great tool to improve upon your company’s strategic sourcing efforts. However, some businesses lack the vision to see the benefits SRM can offer. When you are building the business case for an SRM program in your organization, consider some of the key elements above to gain buy-in.

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