Supplier Relationship Management

A supply base represents a wealth of possibilities and opportunities for any organisation, however, few ever get past interfacing with suppliers at anything other than a transactional or contracting level.  Yet amongst the multitude of suppliers most organisations carry, value, innovation, efficiency, reduced cost and increased security of supply are available to those that can find it and unlock it.  There may even be a handful of suppliers who hold the potential to help grow a brand or business, or improve competitive advantage.  The secret is identifying who these are and figuring out how to engage with them in a way so as to enable this to happen.

Supplier relationship management is an umbrella term that is about deciding the level of intervention and the extent and nature of any relationship needed with suppliers.  For the vast majority this should be minimal with our precious resources being directed only at working with those suppliers with whom we can realise significant and worthwhile value.

The way we view the potential contribution of the supply base is changing as companies try to keep up and find new ways to create wealth from the ever-changing customer demands.  The role of procurement to help make this happen is changing too.  Increasingly suppliers are being engaged to make greater contributions, and will need to continue to do so.  

The role of procurement as a strategic contributor to the bottom line and future success of the business rather than a cost centre is being recognised in the way organisations structure themselves.  Organisations are recognising the need to view the contribution procurement can make with new eyes, shifting away from the established view of procurement’s role as the function that buys things; instead the function must place itself at the centre of the business, align itself with all the other strategic contributors and become an integral enabler to the way the organisation pursues its goals and aspirations using the supply base to support this.  It must also engage with the suppliers in a new way.  Changing how procurement contributes to overall business success requires a rethink and organisations with many years of tactical procurement predicated by an organisational structure, capability and mindset built around this tend to find the challenge of making the change to become a strategic enabler extremely difficult, but not impossible.

With our supplier relationship management service, we will optimise your business relationships.