| A Supplier Relationship Management (or SRM) | | | | customers better by being better, faster and |
| programme can deliver significant benefits for both | | | | cheaper. This is the reason and basis for SRM. |
| the supplier and the buyer. But exactly what is a | | | | Q. Who should you partner with? |
| SRM programme and how does it deliver value? Here | | | | A. If SRM is to work it has to deliver benefits for |
| are some commonly asked questions and their | | | | both the buying and supplying organisations. This |
| answers. | | | | means that you have to partner with those suppliers |
| Q. What exactly is SRM? | | | | with whom you can forge a mutual benefit. This |
| A. Type supplier relationship management into any | | | | might be because you can drive out cost by merging |
| search engine and the chances are that it will return | | | | operations (this is at the core of the reason for |
| several hundred thousand hits. The majority of these | | | | outsourcing) or because together you can develop |
| will be related to software applications. Yes, you may | | | | superior products (take a look at industries such as |
| need an application to track details about your | | | | automotive) or because you need each other to win |
| suppliers but a real SRM programme is far more than | | | | profitable business (much as IT related companies |
| this. It is a way of working with your critical and | | | | form alliances to bid for work). |
| strategic suppliers to systematically identify | | | | Your starting point to identify SRM partners is to |
| opportunities to reduce cost, improve service and | | | | create your supply positioning matrix (importance of |
| quality and innovate. These opportunities are then run | | | | the things you buy versus the supply risk or |
| as projects with team members from both sides. | | | | complexity) and identify the suppliers for your |
| Q. Why is SRM needed? | | | | categories in the strategic quadrant. Then look at the |
| A. In more and more situations it is no longer | | | | preferencing of each of these suppliers (whether or |
| individual organisations that win but the supply chains | | | | not the market is important to them and whether or |
| in which they operate. Businesses (and increasingly | | | | not you are seen as a key account). Where there is |
| public sector and not-for-profit organisations) cannot | | | | a match between the category being strategic for |
| survive in isolation. They need to form strong | | | | you and a supplier who also sees the market and |
| alliances with partners up and down the supply chain | | | | you as core to them then you have a potential SRM |
| and together find innovative ways to serve their end | | | | partner. |