Supplier relationship management (SRM) is the active management of an organization’s supply base. Typically, the key goals of an SRM program are to manage and improve supplier performance and to manage and mitigate the inherent risk of supplier relationships, SRM segments and prioritizes suppliers to ensure that resources are allocated and processes and activities are managed and prioritized accordingly.
SRM is a critical focus area for many organizations, as successful SRM programs can deliver a wide range of benefits, including risk mitigation, improved supplier relationships, improved performance, and savings. It can be challenging to successfully implement SRM capabilities and behaviors within Procurement and the broader organization, but TealBook can help you get started. As with the other focus areas covered in this series, SRM requires trusted supplier data.
Without access to comprehensive supplier data, Procurement will never be able to effectively execute SRM. TealBook’s Supplier Data Platform enables organizations to evolve their data by automating the collection, enrichment and distribution of supplier data across all relevant systems. With a single source of truth, organizations can turn their focus to delivering value through SRM.
Below are three key ways that TealBook can support your SRM program and efforts.
- Improve Efficiency of Supplier Management & SRM Processes
Manual supplier data management consumes precious time and resources and leads to unreliable data and inefficiencies. By integrating TealBook’s Supplier Data Platform into your existing technology landscape, procurement will finally have true visibility to suppliers and the state of the supplier market. With this knowledge, supplier segmentation is possible. Supplier segmentation is a critical part of SRM and is how organizations determine the best way to prioritize their efforts as well as efficiently allocate resources.
- Develop Relationships with Suppliers
Once strategic suppliers have been identified, organizations can focus on becoming a “customer of choice” to those suppliers. This can drive considerable long-term benefits and result in competitive advantage, especially during times of increased risk and uncertainty. Organizations who are considered a customer of choice may experience favorable treatment by the supplier, which could look like shorter quote and lead times, preferred pricing, or access to constrained supply.
- Reduce Relationship Risk
With the improved visibility and ability to manage supplier relationships, organizations can more closely focus on monitoring the risks associated with strategic supplier relationships. Supplier risk manifests itself in many ways, such as miscommunication, poor quality, sudden price hikes, or even dissolution of the relationship. Effective SRM can help mitigate all of these risks, since having established relationships with key suppliers promotes communication and collaboration. In practice, examples of this may include the sharing of best practices with suppliers, use of gainsharing agreements, relationship management through mutual metrics integrated with category management and structured buyer-supplier senior executive relationships.
Ready to learn how TealBook can support your SRM program and efforts? Click here to get started today.