Unleashing the power of Supplier Relationship Management

In a world of economic uncertainty, every organisation is facing supply chain issues and increased costs. That’s why Supplier Relationship Management/SRM is becoming a key strategic focus for many. In fact, in the recent Procurement Key Issues Study, over half of the procurement executives surveyed reported that supplier relationship management was a planned improvement initiative for them this year, alongside other priorities such as talent attraction/management, data analytics and reporting, and strategic sourcing.

What is Supplier Relationship Management/SRM?

Supplier Relationship Management/SRM is the process of building and maintaining long-term, mutually beneficial relationships with key suppliers. By effectively managing their supplier relationships, organisations can achieve many key benefits, including:

• Cost savings: Organisations can negotiate better prices and terms on the goods and services they procure. This can lead to significant cost savings, which can be reinvested in other areas to drive growth, or improve the bottom line.
• Increased quality: When organisations have strong relationships with their supplier, they can be confident that the goods or services they purchase will meet, or even exceed their quality standards and requirements. This is important for maintaining customer satisfaction and avoiding costly recalls or service/product liability issues.
• Enhanced innovation: By working with suppliers to share ideas and information, organisations can gain access to new technologies and innovations that can help them stay ahead of the competition, improve service or save money. This can lead to new products or services that can generate new revenue streams or add value to their customer relationships.
• Improved agility: We are living in a fast-paced, unpredictable world, so it’s important for organisations to be able to respond quickly to changes in the market. By having strong relationships with suppliers, organisations can quickly adapt to changes in demand and supply and maintain a competitive edge.
• Reduced risk: When organisations have strong relationships with their suppliers, they are less likely to experience disruption in their supply chain. This can help them avoid lost sales and revenue, customer dissatisfaction and damage to their reputation.

In addition to these specific benefits, supplier relationship management/SRM can also help to improve the overall performance in a number of ways: it can help organisations reduce the time it takes to get new products and services to market, improve customer service, increase employee morale, and strengthen the brand.

Why are organisations struggling with Supplier Relationship Management/SRM?

One of the key challenges for organisations is a shortage of talent and resources. Demand for supply chain managers has increased steadily over the last few years, with available vacancies in 2022 36% higher than in 2019. Whilst this highlights the importance organisations are now putting on managing their suppliers more effectively to combat supply chain issues, it also emphasises how hard it is to find and retain people with the right skill set.

Technology is also a challenge. A recent survey reported that just 14% of organisations had adopted specialist relationship management software, with most relying on generic applications like Microsoft Excel and SharePoint.

Adopting new technology or employing the specialist skills take time and money, and can temporarily disrupt business as usual, therefore supplier relationship management/SRM can be a time-consuming and expensive process that requires committed investment to implement and maintain – putting many organisations off.

Supplier relationship management/SRM also requires buy-in from wider stakeholders in the organisation. SRM is a cross-functional process that requires effective communication and collaboration between different departments, so if senior executives across the wider business don’t see the value in it, it’s unlikely that the organisation will be able to make the necessary investments and changes needed to do it properly. Without the necessary support, it can be difficult to build and maintain strong, trusted relationships with suppliers.

Six quick wins to improve your Supplier Relationship Management/SRM.

Here are our six top tips to improve supplier relationship management/SRM in your organisation:

1. Set clear goals and objectives: Understand what you want to achieve by improving your supplier relationship and then develop the plan to achieve them.
2. Identify your key suppliers/contracts: Some suppliers are more important or critical to your organisation than others. Take time to identify these key suppliers and focus your SRM efforts on them.
3. Build relationships with your suppliers: SRM is not just about managing contracts and invoices. It’s about building relationships with your suppliers. Get to know the people you work with, understand their goals and challenges, and build mutual trust and win-win outcomes.
4. Communicate effectively: Make sure you communicate with your suppliers on a regular basis. Share information about your organisation’s plans and requirements and listen to their concerns and feedback to improve collaboration.
5. Celebrate success: When suppliers do a good job, let them know! Acknowledge their contributions and thank them for their partnership. This will help to build goodwill and encourage them to go the extra mile for you.
6. Address problems promptly: Don’t let problems fester. Work with your suppliers to find solutions that are mutually beneficial.

Of course, these quick wins assume you have time away from the day-to-day to focus more heavily on your supplier relationship which is often not the case. Many organisations do not have the budget, or time, to find an additional internal resource to specialise in SRM. This is when external support, like eXceeding, can really be helpful in getting your SRM programme off the ground.

How can eXceeding help you with your Supplier Relationship Management?

At eXceeding, we can help to save you time and resources by taking on the burden on SRM implementation and management.

Our SRM experts have experience working with a variety of organisations in different industries and have seen what works and what doesn’t. This is invaluable to organisations that are new to SRM or that are struggling to improve their SRM process.

We have specialist-level knowledge of the supplier marketplace and are not biased towards any particular supplier. This allows us to provide objective advice and recommendations that are best suited to your specific needs.

We can also offer advice on the latest SRM best practices and get them in place in your organisation swiftly by managing change and communicating with stakeholders across the business to ensure it is successful.

If you’re struggling with supplier relationship management and want to use the process to optimise costs, reduce risk and minimise disruption, let’s talk. Our consultants will provide support and guidance that is unique for your organisation so that you can achieve better results.

Drop us an email at [email protected], or give us a call on 0330 088 1620, we’d love to hear from you.