Supplier Relationship Management
Supplier Relationship Management
Take the Higher Ground with Supplier Relationship Management

Does the following situation sound familiar? Your procurement group has cycled through several years sourcing your most important spend categories. With each new round of RFP’s, you see a significant reduction in the benefits generated and you begin to realize that too much of your effort is being spent in managing the switch to the new suppliers and stabilizing those relationships. Little if any time is being dedicated to working with your suppliers on your most pressing business problems. Don’t despair. It is time to think about deploying a Supplier Relationship Management strategy.

Supplier Relationship Management is relatively new but has gained great traction over the last several years. Essentially, SRM recognizes that there is a select group of suppliers who are critical to your business. And that does not simply mean suppliers with the largest spend but would include those suppliers who are critical to your success and help you differentiate your business in the marketplace. By engaging that group of suppliers in a trusting and integrated relationship, with the right governance and procedures, value is created for both parties.

The first part of creating an SRM program, is looking at your supply base and determining who you are working with in the most critical areas of your business. These are the suppliers who bring important knowledge and expertise and with whom you would greatly benefit from their input. They are the partners that look at the relationship from a longer term perspective and recognize the importance of performing well beyond the simple contractual terms. Why would they go to these added lengths for you? Because they recognize that business has become increasingly more competitive and they know that by bringing you their best ideas, that they are likely to have a longer relationship with you and the opportunity to win more business with you in other divisions, geographies and other service offerings.

Building this kind of program takes effort in determining which suppliers to include, sharing the critical issues you face as a business and ultimately developing joint business plans and measures of success. Wouldn’t you rather leverage the incredible knowledge of your key suppliers to help your company succeed? If you are serious about developing a comprehensive SRM program, let AES Consulting help by contacting us at 609-306-8176 or by using our online contact form