Supplier Relationship Management Case Study

Introduction

There are many names for supplier relationship management (SRM), they include supplier base management, supplier lifecycle management and supplier information management, while the names have changed over the years the underlying purpose of SRM has remained the same. SRM is “a comprehensive approach to managing an enterprise 's interactions with the organizations that supply the goods and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes between an enterprise and its suppliers.” (Pondiuni.org, (n.d.), p. 171).

SRM is also a resource optimizer of people and technology, the relationship starts before the contract is created. SRM is not something created after

You want to select suppliers that you trust, reduce your exposure to risks, has performed well in the past by delivering cost savings, communicated problems in advance, remained loyal to the company and has proven to be a customer of choice. “Organizations need more flexibility in their supply chains and should seek stronger partnerships with their suppliers, moving away from transactional relationships based on costs and delivery times, and focus more on long-term mutually beneficial relationships.” (Rosca, 2015, para 6). Consider reducing the number of suppliers. “Having a closer relationship with a few choice suppliers allows for both parties to work together to control costs, and eliminating troublesome suppliers can quickly increase the efficiency of your purchasing and administrative staffs.” (4 Steps to Effective SRM, 2016, para 5) Keep the lines of communication open, clarify roles and responsibilities, define expectations, schedule regular meetings with suppliers to understand what their working on, discuss any pain points they may have. Be upfront with the supplier regarding your needs so they can understand ways to improve their process. Give the supplier as much lead time as possible so they can make the necessary adjustments to their production schedule. Let the supplier tour the facility,

As the opportunity to reduce costs by negotiating with suppliers diminish, businesses must turn to other alternatives to increase profitability and productivity without sacrificing quality. The Supplier Management Group has developed a Supplier Relationship Management Maturity Model. This model provides methods for assessing and developing capabilities that enhance an organization’s ability to manage its suppliers successfully, consistently, and predictably; in order to accomplish the mission of the organization and improve organizational effectiveness. (Birmingham, 2008, para1). Multiple companies and organizations participated in the creation of the SRM model below. The model indicates the processes, practices and strategies to draw on. The SRM maturity model is divided into five maturity levels, Limited to None, Need Identified, Implemented, Utilized and Leveraged. As the diagram below shows organizations are then measured against five categories, Spend Visibility, Supplier Segmentation, Collaboration, Performance, and Risk Management. The model is intended to assist organizations in assessing their SRM efforts from inception to