Supplier Relationship Management is so important and yet many organisations are not good at it. But what things do people get wrong with SRM?
We’ve all been there – focusing so intently on delighting our customers that we sometimes forget about the other crucial end of our supply chain: our suppliers. Yet, as we’ve seen time and again, the way we manage these relationships can make or break our supply chain’s success.
Think of Supplier Relationship Management (SRM) as the secret sauce that transforms ordinary vendor arrangements into powerful strategic partnerships. It’s not just about monitoring KPIs or ticking boxes on performance metrics – though these are important. What we’re really talking about is building relationships that create value beyond the basic transaction.
When you implement SRM effectively, you’re not just getting what you paid for – you’re tapping into your suppliers’ expertise in ways you never imagined. These are companies that live and breathe their specific products or services, and through proper SRM, you can harness that knowledge to innovate and improve your own operations.
The key? It’s all about establishing what we in the industry call an “operating rhythm.” This means setting up regular touchpoints at every level of the relationship – from day-to-day operations to quarterly strategic reviews. And if these meetings aren’t in your calendar for the entire year, you’re already behind.
What we love about good SRM is how it creates a “J curve” of value – where the benefits you receive far outweigh your investment in the relationship. It’s like watching a garden grow; with proper care and attention, what starts as a simple supplier contract can bloom into a partnership that drives innovation, reduces costs, and creates competitive advantages for both parties.
