| Organisations can no longer operate in isolation, if | | | | The next question you need to answer is whether |
| indeed they ever could. Your customers ultimately | | | | as an organisation you are ready for SRM. There are |
| depend on the excellence of your suppliers because if | | | | a number of factors that you need to consider. |
| they fail, you fail. Top organisations create superb | | | | These include:-o The availability of senior members of |
| supplier alliances to ensure that their customers | | | | staff who are willing to be sponsors of your key |
| receive a valued benefit and continue to use them. | | | | supplier relationships. The issue here is that sponsors |
| The question is who should be your alliance partners? | | | | are needed not only to drive the pace of the SRM |
| Even with initiatives such as supplier base | | | | programme and ensure a quality output but may be |
| consolidation, large organisations in particular typically | | | | needed to unblock barriers to you achieving your |
| will still have several thousand suppliers. Obviously, | | | | SRM objectives.o The perception and reality of the |
| you can't form alliances with all of them. You will need | | | | value that your SRM suppliers are currently delivering. |
| to segment your suppliers in order to identify the | | | | If there is widespread agreement that they are not |
| 'critical few' that merit some form of alliance or | | | | translating their capability into effective delivery and |
| partnership working. | | | | value for money then you are more likely to get |
| Even without this kind of analysis, some suppliers will | | | | support for your programme.o The maturity of your |
| immediately stand out as worthy of some kind of | | | | organisation in terms of its approach to problem |
| closer working relationship. These include:-o Suppliers | | | | solving. SRM is largely about identifying and solving |
| to whom you have outsourced part of your | | | | problems and this is made easier if there is already a |
| organisationo Joint ventures in which you share | | | | culture of continuous improvement in your |
| assets and resources to create valueo Critical | | | | organisation supported by appropriate processes and |
| services or materials without which your organisation | | | | toolkitso The strength of procurement leadership in |
| cannot function. | | | | your organisation. If there is a central group of high |
| The implications of poor performance from these | | | | calibre people who are well connected to and |
| types of supplier can be devastating. One aim of | | | | supported by local procurement people within the |
| supplier relationship management (SRM) is to ensure | | | | business units of your organisation then SRM |
| that this does not happen. | | | | becomes easier to drive and coordinate. |