Supplier relationship management (SRM) refers to your interactions with third-party suppliers who provide goods and services to your organisation. Here are some tips for streamlining your supplier management system.
1. Build good relationships
Relationships should be growth-focused, whatever you are buying.
A reactive approach acts only when unpleasant situations involving suppliers occur. This approach wastes time and resources.
A strategic approach begins even before a supplier agreement is signed. This approach leads to successful relationships from the beginning.
Suppliers can have a huge impact on your processes, and they play a vital role in driving revenue. Suppliers who are unreliable can adversely affect finances and clients.
2. Suppliers as partners
Suppliers are more than simply vendors; they are partners. This partnership relies on trust as well as financial transactions. Inform suppliers about your processes, and listen to their concerns.
If you are seeking contract management software, you may find supplier management software useful for keeping track of information about suppliers.
The Chartered Institute of Procurement and Supply (CIPS) has more on SRM at https://www.cips.org/en/knowledge/procurement-topics-and-skills/srm-and-sc-management/supplier-relationship–management/.
3. Build strong relationships ‘
Be sure to stay in touch with your suppliers. Keep them updated on strategy so they know where they stand. A deeper relationship with frequent contact enables this communication to grow organically.
4. Necessary agreement
If you buy from a supplier regularly, a supplier relationship agreement is vital. Put in whatever both parties anticipate from the partnership, such as the price, delivery terms, service or item description and payment terms, and then get both parties to sign it. This document will reduce the likelihood of disputes or confusion.
5. Calculate the risks
Evaluate the risks of using a supplier, especially if your supply chain is complex. Ask to see examples of previous work, and query how the company deals with a crisis. Is their pricing competitive? Are they stable financially? Don’t necessarily select the cheapest supplier. Choose peace of mind; if one lets you down, this can impact your customers.
6. Improve workflow
With SRM, the time and cost savings are considerable. Put together documentation that will help lead your team through the process of supplier management and create dedicated staff roles for supervising SRM. This will give your organisation actionable insights that can add value to the supplier relationship.