You’ve probably heard the term “supplier relationship management” before, but what does it mean? And more importantly, how can you implement it in your procurement process?
Put simply, supplier relationship management (SRM) is the practice of managing your suppliers and their relationships. This can include everything from maintaining contact information to tracking orders and payments.
The goal of SRM is to create a more efficient procurement process and strengthen relationships with your suppliers. By implementing SRM in your organization, you can save time and money while improving supplier performance.
What Is Supplier Relationship Management?
Supplier Relationship Management (SRM) is the proactive management of supplier performance in order to optimize the relationship and achieve better business outcomes. Put simply, SRM is a process that enables you to manage your suppliers more effectively. Despite the fact that CPOs are increasingly concerned with SRM, only 56% of polled procurement teams use technology to implement supplier relationship management programs.
To implement SRM in your procurement process, you need to understand what it is and what it can do for you. SRM is not a new concept, but its importance has increased as organizations have become more complex and supply chains have become more global.
The benefits of SRM are numerous and can include improved supplier quality, reduced costs, accelerated innovation, and improved customer service. By implementing SRM in your procurement process, you can maximize the value of your suppliers and achieve better business outcomes.
Four Tips To Develop an Effective Supplier Relationship Strategy
Developing an effective supplier relationship strategy is critical to the success of your procurement process. Here are some tips on how to get started:
- Define your needs and priorities. What are your top priorities when it comes to sourcing and procurement? What qualities are you looking for in a supplier? Defining your needs and priorities upfront will help you develop a strategy tailored to your needs.
- Establish selection criteria. Once you know what you’re looking for, establish selection criteria to help you evaluate potential suppliers. Your criteria could include quality, price, delivery time, risk level, and other factors.
- Build a strong relationship with key suppliers. Establishing strong relationships with key suppliers is essential for developing a successful partnership. Take the time to get to know your suppliers and their business. Ensure that both parties agree on expectations and objectives.
- Communicate regularly. Communication is key in any relationship; it’s no different for supplier relationships. Make sure to share updates on projects, deadlines, and goals. This communication helps ensure that both parties are working towards the same objectives.
The Benefits of SRM for Procurement
There are several benefits to implementing SRM in your procurement process:
- Improved communication: SRM systems facilitate communication between buyers and suppliers. Both parties understand expectations, and can quickly resolve any issues that arise.
- Better supplier management: With SRM, you can keep track of all your suppliers in one place, making it easier to compare prices, quality, and delivery times. Consolidated data also makes it easier to decide which supplier is best to work with.
- Increased efficiency: SRM systems help automate the procurement process. This means that tasks like ordering, tracking, and paying for goods can be done quickly and easily.
- Reduced costs: By improving communication and coordination between buyers and suppliers, SRM systems help reduce waste and improve efficiency. This leads to cost savings for both parties involved.
Challenges of SRM Implementations
When it comes to implementing Supplier Relationship Management into your organization, there can be a lot of challenges. One of the biggest is proper management. You’ll need to dedicate resources to setting up systems and managing supplier relationships. It may also be difficult to get all stakeholders involved in the process on board.
Another potential challenge is getting access to the correct data and metrics that will help you meet your objectives. Without this data, it can be hard to make decisions about what processes and relationships you should focus on or how effectively you are meeting your goals.
At SupplierGATEWAY, we understand these challenges. That’s why we created our Enterprise Supplier Data Management Platform. Our platform makes it easy for you to collect the necessary data to manage a successful SRM program and ensure that your organization gets the most out of its supplier relationships.
Best Practices for Implementing SRM in Your Procurement Process
The best way to implement SRM in your procurement process is by establishing standardized processes and protocols throughout your entire supply chain. This includes developing clear rules and guidelines for suppliers, including offering comprehensive training for suppliers on how to meet company expectations. It also includes regular communication with suppliers to ensure issues are addressed quickly.
At SupplierGATEWAY, we believe that technology is key to efficient supplier management. Our Enterprise Supplier Data Management Platform is an all-in-one, cloud-based platform that centralizes your supplier data. Our platform includes supplier risk management tools, a supplier onboarding portal, supplier sourcing, supplier payment, economic impact, Tier 1 and Tier 2 supplier diversity reporting, and more.
The platform makes it easier for buyers and suppliers to do business, enables visibility into the supply chain, and helps organizations proactively manage the risks associated with long-term strategic partnerships. With this platform in place, you can ensure your SRM process is efficient and effective.
How SupplierGATEWAY Enables Efficient Supplier Management
SupplierGATEWAY is a one-stop shop for supplier relationship management. Our Enterprise Supplier Data Management Platform can help you maximize agility in your procurement processes and gain greater visibility into your supply chain.
Our all-in-one, cloud-based platform centralizes your supplier data and includes risk assessment tools, supplier onboarding, sourcing, payment, economic impact, Tier 1 and Tier 2 supplier diversity reporting, and more. Thanks to automation, our platform makes it easier for both buyers and suppliers to do business quickly.
SupplierGATEWAY’s platform enables auditable processes for capturing purchase orders (POs) and provides a holistic view of supplier performance in real time. This allows you to quickly identify any areas of non-compliance or supply chain risk as they arise. With detailed analytics and performance metrics built in, you’re able to run reports to get a better understanding of the overall health of your supply chain.
Plus, you gain greater control over the entire procurement process — from sourcing to payment — so you can reduce exposure to potential vendor risks while optimizing cost savings throughout the entire cycle.
So, what is supplier relationship management? It is a process that allows you to track, monitor, and evaluate the interactions between your organization and its suppliers. By doing so, you can identify and assess the risks and opportunities associated with each supplier, and implement strategies to improve supplier performance.
To maximize your procurement process, you should implement supplier relationship management. This will allow you to improve your supplier management process and get the most out of your suppliers.