What is Supplier Relationship Management: A Complete Guide
What is Supplier Relationship Management?
Supplier relationship management is also known as SRM. This systematic approach is used to evaluate the contributions of suppliers to your business. This helps you identify the suppliers that have the greatest impact on your business’ success and makes sure they perform well. Supply chain management employs SRM in operations, procurement, and project management.
SRM can help you build positive relationships with suppliers and guide you in the activities that you should do with them. SRM works in the same way that customer relationship management (or CRM) does on the front end dealing with customers.
SRM’s main purpose is to improve business processes between your company and your suppliers. You can improve the efficiency of your business and that of your suppliers by using a simplified approach. Although SRM approaches can differ from one organization to another, the key focus of SRM is to build a mutually beneficial relationship between all your suppliers, particularly those that are strategic partners for your brand.
SRM can be used to refer to both business practices as well as software. Let’s take a look at each.
SRM Business Practices
Three steps can be used to manage your supply chain relationships. This dynamic approach will simplify supplier management across your entire supply chain.
Step 1: Segment Suppliers
This stage involves looking at all your suppliers and deciding how important they are for your business. Segmentation of suppliers focuses on identifying your key suppliers. Those who supply the essential goods and services required to keep operations running. So you can choose who to concentrate your attention on. Nonetheless, you shouldn’t overlook important supplier
There are many types of suppliers you will work with — wholesalers and distributors, manufacturers, import sources, and manufacturers. Each one plays an important role in your business, and segmentation ensures that they are all given the right attention.
Originally published on The Tech Trend
