| Massive improvements in cost and service come | | | | and supplier you have the basis of a successful SRM |
| from an effective supplier relationship management | | | | programme. |
| (SRM) programme. There are five components of a | | | | The "why" of the process is the business case that |
| successful supplier relationship management | | | | shows how SRM can deliver value and help both |
| programme. These are best thought of as the "who", | | | | sides to grow. It should cover the purpose of the |
| "why", "how", "with what" and "when" questions. | | | | relationship, its mission and its objectives. |
| Answer these correctly and the success of your | | | | Selecting partners for SRM and agreeing the "why" |
| SRM programme is assured. | | | | of the relationship is something that you do at the |
| The SRM process starts with selecting the right | | | | start of the process and revisit annually. |
| partners - the "who". This is key to the success of | | | | The "how" of the SRM process is where you |
| your programme - a supplier may be key to you but | | | | determine the specific initiatives that you and the |
| are you to them? Unless both parties see the other | | | | supplier will do jointly in order to deliver value. This |
| as a strategic partner the programme will probably | | | | requires a process that proactively fills a pipeline of |
| fail. | | | | initiatives that help to meet the goals of each |
| You can use supply positioning and supplier | | | | organisation and so can demonstrate the value they |
| preferencing approaches to select the right supplier. | | | | add. |
| Supply positioning is the result of segmenting your | | | | The "with what and when" covers roles and |
| purchase categories based on the importance to | | | | responsibilities for delivering the improvement |
| your organisation and the degree of supply risk. | | | | initiatives, project and programme management. |
| Categories that are high in importance and have high | | | | The "how" and "with what" sections of the process |
| supply risk are your strategic categories. Equally, | | | | will fill and maintain a pipeline of possible initiatives. |
| supplier preferencing summarises their approach to | | | | These are taken forward as business cases to your |
| the categories they sell, based on the importance of | | | | SRM Sponsors for review and agreement. A |
| the market and the importance of your account. | | | | successful SRM programme will always develop more |
| Categories that are in important markets and have | | | | improvement ideas than you have resources to |
| you as an important account are strategic to them. | | | | implement. |
| When the category is strategic to both the buyer | | | | |