This crazy little thing called SRM

One thing you will need to agree with your suppliers as well as your internal Sponsors is … exactly what is SRM?

Supplier Relationship Management means different things to different people.

For example, type the phrase into a search engine such as Google and you will get more than two million hits, many of which relate to software applications for recording and analysing supplier data.

Others think of SRM as a means of monitoring, measuring and reporting supplier performance.

What you should do in your supplier relationship management programme is to use a process with which you can systematically find and deliver opportunities for delivering cost and service benefits (both immediate and longer term) and for initiating innovation and continuous improvement.

Until you deliver on this short term focus it’s unlikely you will get support for the more attractive (and ultimately more effective) longer term SRM outcomes like joint business planning.

So, if SRM is important to you, you have to ask the next question which is whether (as an organisation) you are ready for SRM. There are a number of factors that you need to consider. These include:-

 

·        The availability of senior members of staff who are willing to be sponsors of your key supplier relationships.  The issue here is that sponsors are needed not only to drive the pace of the SRM programme and ensure a quality output but may be needed to unblock organisational and policy barriers to you achieving your SRM objectives.

·        The perception and reality of the value that your SRM suppliers are currently delivering. If there is widespread agreement that they are not translating their capability into effective delivery and value for money then you are more likely to get support for your programme.

·        The maturity of your organisation in terms of its approach to problem solving.  SRM is largely about identifying and solving problems and this is made easier if there is already a culture of continuous improvement in your organisation supported by appropriate processes and toolkits.

·        The strength of procurement leadership in your organisation. If there is a central group of high calibre people who are well connected to and supported by local procurement people within the business units of your organisation then SRM becomes easier to drive and coordinate

What’s your view?  What do you consider to be good SRM and can Procurement do it alone?