New Focus on Supplier Relationship Management

By Patrick Burnson, Executive Editor
June 09, 2014 - SCMR Editorial

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 PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Article Topics

News · Supply Chain · Procurement · Management · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA