SRM
For those seeking greater , long term value from their suppliers , supplier relationship management ( SRM ) is an integral component of the procurement function . With no end in sight to the volatility and disruption of the supply chain industry , and no ability to predict the risks to come , “ both SRM and category management have become increasingly important as an operating model for organisations hoping to navigate the turmoil ”, according to Andrea Greenwald , Senior Director Analyst for Gartner ’ s Procurement Advisory Practice .
A well-designed SRM programme can help companies to increase their collaboration and identify the right kind of suppliers suited to their business , product and beliefs . It can also help to improve cost optimisation , top-line growth , supplier innovation , and process improvements .
Greenwald explains that the perfect recipe for successful SRM is to : “ define the charter for the SRM programme , segment suppliers for criticality and risk to your organisation , develop a governance model to manage said suppliers , map and gain buy in from all stakeholders , and govern the suppliers according to the defined governance .”
Following this ‘ recipe for success ’, helps to develop a reputation of being a ‘ customer of choice ’ benefiting from competitive preferences from scarce resources across a critical mass of suppliers within an organisation ’ s supply base . “ To be a customer of choice , sourcing and procurement organisations must consistently exhibit specific customer-ofchoice behaviours with strategic suppliers to build a joint relationship and trust – such as
procurementmag . com 79