Supplier Relationship Management
Adopting a partnership approach with strategic suppliers drives cost efficiency through innovation while further reducing business risk. Whilst your supplier is pleased to supply you you’re not the only client they have. It’s as important to be a ‘client of choice’ to you as you are to them.
Procurement teams (in-house or otherwise) have a habit of focusing solely on strategic sourcing, only to then, following selection, neglect the importance of ongoing supplier relationship management (SRM).
So, what do we mean by SRM and why do we believe is it so important? Not just important we’re kind of evangelical about it, it’s something we feel is one of the most critical and yet undervalued areas of procurement, often actively avoided.
Simply defined, SRM is the strategic management of organisations who supply goods and services to your business. It is embracing this discipline which will help to maximise overall value while also improving supplier performance and creating a truly beneficial long term partnership.
We have found that organisations which have yet to embed SRM techniques are likely to experience any number of issues such as:
- Inconsistent approach to supplier management across the organisation
- Unwillingness to share information to help deliver improvement
- Supplier under-performance versus agreed key performance indicators, largely driven by misaligned expectations and inadequate measurement
- Blame culture with little collaboration or root cause analysis and weak evidence based arguments
Our Approach will include:
Taking annual spend and business importance into account, Hawtrey Dene uses its segmentation tool to profile and assign an SRM category rating to each supplier. These ratings ultimately dictate how each supplier is managed and who is responsible for the ongoing management. Our category ratings are:
- Strategic – high value spend and business critical
- Leverage – high value spend but low risk
- Bottleneck – low value spend but high risk
- Routine – low value spend and low business risk
Following the assignment of SRM ratings, we will show yous where suppliers are not being effectively managed and what we can do together to remedy this.
A disciplined approach to SRM delivers a range of benefits to all organisations. These include:
- improved supplier performance versus contract KPIs
- reduction in business risk
- a better working relationship between the organisation and its suppliers
- innovative ideas to unlock further cost reduction opportunities, with productivity gains shared between client and supplier
To learn more about our approach to SRM, how we’ve helped other clients, and how we can help your business improve the performance of its key suppliers, please visit the contact us page.
Call us on
+44 (0)20 3740 4150 or send us
an email to find out how we can help you.