Strategies for improving Supplier Relationship Management (SRM) are the hallmark of the Modern Procurement Function.
In this article we are providing our list of 10 strategies for effective Supplier Relationship Management:
Understand and Accommodate Supplier Interest
Understanding what makes a supplier tick, why they do what they what they do, builds trust and synergy, the two critical ingredients for success in business. The interest of your suppliers should match your supplier selection criteria.
Align Suppliers to your Strategic Plan
This is critical to success in business. The key is to have common goals and objectives. Your supplier selection processes should be so robust that the output is the selection of suppliers whose strategic plans are closely aligned to yours.
Include suppliers in your decision-making processes. Collaborate in all mission critical areas of your business. From new product design to the manufacture and delivery of finished goods, involve your suppliers for better supply chain results.
Align Suppliers to you Customer Requirements
Help your supplier to succeed by ensuring that they understand your customer requirements. This will ensure that the inputs you purchase from your suppliers, enable your conversion processes to produce goods and services that meet your customer specifications.
Leverage Supplier Capability and Innovative Capacities
Select only suppliers who have world class and innovative capabilities that they are willing to transfer to your organization. The better your organization is at transferring this knowledge the better your procurement function will be at meeting its mandate
Help Suppliers succeed
Co-Venture initiatives to realize Supply Chain Efficiencies and split savings
Partner with your suppliers to identify opportunities to improve supply chain processes and share the savings. This action will benefit and strengthen both entities.
Ensure Supplier fiscal viability
Make sure you pay your suppliers on time and that you do not drive them into a negative cashflow position.
This is the hallmark of supply chain and procurement success. Share information on your demand and supply forecasts and any planned major changes in business models.
This is best done by aligning all aspects of your supply chains to your customer requirements. All technologies should speak to each other in real-time, such as supplier performance reviews. Blockchain technology is emerging as a core mechanism to align supplier and customer processes.