There are a lot of efforts made by a business to work well on Customer Relationship Management. But what about Supplier Relationship Management?
With all the unabated focus made on the customers and revenue generation, business owners usually don’t pay heed to their suppliers and the advantages they hold with them.
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Struggle or succeed, mostly these two aspects depend on how efficiently you handle your procurement and seamlessly deliver the goods and ultimately decide your fate.
As the working sphere is ever-growing and highly competitive, there arises the need for marketers to apply Supplier Quality Management techniques to stand out of the crowd delivering the best quality products/services/goods in the hands of the end-user.
Supplier Relationship Management (SRM) Defined
You may get many definitions of SRM but on simple grounds, supplier relationship management can be well explained as an interaction with a supplier which involves assessment and examination, procurement and strategy formulation- all done through a single channel.
With respect to overall business, SRM is a systematic evaluation of supplier’s assets judging their capabilities. It is merely to determine, plan and execute all the engagement efforts made with vendors in a coordinative manner throughout the relationship management lifecycle
“The aim is to maximize the value by the attempts made to benefit both the business owners as well as the suppliers.”
Steps Involved in Supplier Relationship Management to Assess Supplier’s Contribution
Testing the ultimate value of your employees, partners or even vendors involves many key principles to be executed to come up to a conclusion. Take a rundown at the steps involved in the whole process:
- Segmentation and Categorization
Separating and dividing you suppliers is a primary step to be moved on with.
It becomes highly crucial to categorize your vendors as per your requirements and needs so that they prove beneficial to the organization.
If this step is not executed well, the further steps would not adjust well with your strategies and set of actions.
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- Creating Strategic Objectives
After analyzing and determining the type of relations to share there comes the need to set goals as per the segmented groups.
Targets and objectives need to be set on priority to contribute and harmonize well with your business requirements to procure projects and tenders.
The common agenda agreed on with the suppliers further leads you to the way of strategy creation.
- Performing Activities
Activities, like running SRM programs and collaboratively implementing of projects, are made feasible in this particular step to deliver desired value to the business.
Along with practicing and implementing the plans and idea, the assessment also takes place which determines the probable outcomes of the workings.
- Evaluation
It involves regular checks and evaluation of the supplier performance. Many validations and verifications are done on the activities and internal processes to check whether the SRM partnerships are delivering the desired outcomes or not.
Evaluation and monitoring is a continuous process that is run frequently and must not stop at any iterative stage of development.
Today, there are many robust SRM tools available in the market on which you can rely on to perfectly visualize your action plan of suppliers and analyze things those justify your proposals or decisions.
Concrete Ways of SRM to Test the Value of Suppliers
Supplier Relationship Management deals effectively with the suppliers and manages their relationship with companies in a healthy manner. There are some ways in which SRM helps make powerful procurement moves.
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- SRM techniques allow identifying value adding opportunities in the supply chain
- The platform helps to review the engaged vendors to make profits in the context of quality and cost
- The relationship management works closely with suppliers to encourage them to maximize their gains as well as multiply the business’s profits.
- SRM works and manages with the cluster of suppliers to get the best out of their interaction with them and tap into new opportunities
- It also applies powerful partnering approaches to enhance the growth of the parties involved.
Hope this documentation makes you clear how valuable vendors and suppliers are those enable your business to grow progressively with the successful attempts and efforts made by all.