Subscribe to our free, weekly email newsletter!


New focus on supplier relationship management

By Patrick Burnson, Executive Editor
June 09, 2014

Supplier Relationship Management (SRM) may be staging a comeback, as companies seek new ways of mitigating risk and controlling costs.

According to a new report by Source One Management Services, LLC, supply chain managers are again realizing the value of extending the value relationship.

“Suppliers can be neglected during the course of their contracts,” says Brad Carlson, director of Source One’s Supplier Management practice. “And though some companies have an informal supplier management process, it usually lacks the formality and processes to drive success. With SRM, a business can not only benefit from the initial sourcing phase, but also help suppliers remain proactive and engaged to drive collaboration so that they are able to add to the sustainability and profitability of your organization.”

The recently-published report, “Building the Case for Supplier Relationship Management,” maintains that such a focus can directly plump up an organization’s bottom line.

“Our paper suggests ways for supply chain managers to ‘operationalize’ the process,” says Carlson. “While the SRM concept has been around for some time, we feel that many companies have failed to use it at its full potential.”

According to Carlson, the initial capital outlay does not have to be large, as “pilot programs” can be introduced to explore the gaps in supplier management. This can “stratified” to include a company’s IT, finance, and procurement divisions.

“There has to be a complete management ‘buy in’ for this to work properly,” he says. “Every level of authority should be brought into the process.”

But SRM is not without its skeptics.

Robert A. Rudzki, a former Fortune 500 Senior Vice President & Chief Procurement Officer, who is now President of Greybeard Advisors LLC, says that to portray SRM as some sort of distinct, separate process adds unnecessary complexity in a world where simplicity pays big dividends.

“If you feel tempted by the SRM sales pitch, first audit your core supply management and sourcing processes,” he cautions.

Rudzki says the best strategic sourcing processes he’s encountered embed the essentials of what is now being referred to as “SRM” – and do so as part of an integrated and strategic business process, not a standalone SRM project.

The Source One SRM Insights Report can be downloaded at http://www.sourceoneinc.com/downloads/SRM-Insights-Report.pdf.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The standard tools of B2B integration--EDI, VANs, translation software--have been around for more than two decades. In IT years, that's many generations of technology you've potentially missed out on if your organization is still using the same B2B integration solution it started with.

According to the report, this option will be made available in 14 metropolitan locales in the United States and will not come with an extra fee for Amazon Prime members.

DHL said this investment is being made to meet customer needs for ongoing growth in international e-commerce and global trade and will also provide more gates to accommodate additional aircraft, warehouse space, and new equipment to provide more capacity for sorting shipments and for unloading and reloading planes.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in March dropped 5.3 percent annually to $96.1 billion.

U.S. carloads were down 9.1 percent annually at 273,387, and intermodal volume was up 4.3 percent annually at 281,090 containers and trailers.

Article Topics

News · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA