Supplier Relationship Management

How does procurement evolve its value beyond cost savings? To make that evolution you have to be better at engaging with suppliers – it’s that simple!

Procurement must show it is in control of supply assurance, or keeping the goods moving. That’s not an easy ask right now. The congestion at ports, lack of container shipping, pent-up demand, parts shortages and so on — all these things are making it difficult for procurement to deliver. (The latest ISM report details that.)

And the supplier has to prioritise its customers just as much as procurement has to prioritise its suppliers — they have allocation rules too. It’s simply foundational thinking: you need good relationships with suppliers to get those preferential allocations when you need them.

But you need more than that — you need visibility from your supplier, you need alerts on lateness, financial early warnings, status of critical components (like semiconductors of late). You simply will not know when your supplies will be available if you don’t have good Supplier Relationship Management in place.

Source: https://spendmatters.com/2021/07/06/unconventional-wisdom-srm-does-it-really-matter-as-much-to-the-supply-chain-as-it-does-to-procurement