Supplier Relationship Management Solutions
What is supplier relationship management solutions?
Supplier relationship management (SRM) is a strategic way to manage all those who provide you with goods and services. The goal is to build a relationship of trust and mutual growth and meet long-term business objectives. Supplier relationship also helps in choosing and working with suppliers that add value, are cost-effective, and are trustworthy.
Why should you manage supplier relationships management solutions?
High-value suppliers are the backbone of any business. Things go well until one of the suppliers goes out of business or fails to fulfil commitments. When a business dependent is on this supplier, it feels the pinch, which can spiral into a much bigger debacle. Therefore, managing suppliers is important. Managing suppliers include agreeing on contracts, payment terms, terms of delivery, quality standards, discounting, special conditions, and innovation.
The benefits of supplier relationship management solutions
- Better quality of goods and services: Procure better quality goods and services by communicating your expectations.
- Lower costs of purchase: Negotiate better prices and quantity of goods and services to purchase.
- Excellent supplier performance: Set clear expectations with the supplier and set a feedback loop continually to improve the quality.
- Greater visibility: Get clear visibility through transparency in the supply chain and establish clear communication channels.
- Better risk management and customer satisfaction: Manage and mitigate the risk due to any disruptions, be flexible to change, and in turn, provide greater customer satisfaction.
- Improved business continuity: Know which suppliers have a good track record so that you can nurture and further grow those relationships.
Strategies to manage supplier relationships
The goal of your supplier relationship management strategy should be to adapt and respond quickly to change. A few steps to effectively implement SRM are:
- Segment the suppliers based on strategic, tactical, and tail vendors. Know which ones are crucial to the company’s success.
- Set the objectives of the SRM activity and align them with the goals of the business.
- Define and use metrics to measure supplier performance. For example, compliance and on-time-in-full (OTIF) are some of the ways you can measure them.
- Have a supplier management strategy that enhances collaboration and mutual growth.
