One of the greatest necessities in the market today is the expectations and management of...
Supplier Relationship Management: how to create winning relationships with suppliers
Knowing how to relate to one's suppliers is important for any small, medium or large company. Management of the supply chain, production and distribution, known as supply chain management, has undergone a period of profound transformation in recent years, especially in our globalized economy.
Some suppliers have a direct impact on the results and objectives of companies, where the latter must hence evaluate a series of choices when it comes to their suppliers. It is not enough to contact the partner who guarantees the greatest savings, but, rather, it is necessary to consider a series of variables included in the so-called SRM, or supplier relationship management.
If you want to optimize relationships with your suppliers, contact us at We Are Fiber, for a customized service so as to manage your business processes effectively and accurately.
What is supplier relationship management and how was it born?
In reality, the concept of SRM is not entirely new and, in fact, dates back to the 1980s. In 1983, Peter Kraljic, a consultant of McKinsey, spoke for the first time about SRM, understood as the ability to manage the approach and relationship with one's suppliers strategically.
Following a given supply management strategy, each company should evaluate and rank suppliers, to determine which products or services are a priority for the business. Following this analysis, it is possible to plan those strategies and actions aimed at improving productivity, simultaneously evaluating the levels of risk and profitability.
In this way, the entire supply process becomes more harmonious and structured, allowing the company to be proactive on the market and respond adequately to customer requests.
The 3 pillars of SRM
The supply chain and the decisions made in this regard have a direct impact on various areas of the company, including logistics, financial aspects, project management, quality control and procurement. It is thus essential that the supply chain is well managed, in order to build up the success of a company. Suppliers are very important partners and must be considered as a fundamental component of the gears of your company. It is therefore necessary to take care of relations with them, avoiding merely considering costs, but, rather, making 360° evaluations.
The first pillar of SRM is the segmentation of suppliers, which entails analyzing the performance and priorities of suppliers in relation to their type of production. The second pillar is the development of a planned strategy to manage suppliers, understood as the distribution of internal resources according to one's business. Finally, the third pillar is the execution of the strategy, which implies an organizational model that allows you to relate adequately to the supplier based on its strategic importance.
Throughout this delicate process, we at We Are Fiber can provide you with the right tools to manage the relationship with your suppliers successfully, putting fuel into your company's engine, so that you can be one step ahead of your competitors.
How to build winning relationships with suppliers
A good SRM strategy is not aimed at merely reducing procurement costs, but its benefits are tangible in the medium and long term and are measured by way of other indicators, rather than simply cost efficiency.
It is therefore important to focus on the relationship with the supplier, establishing one of trust and mutual esteem to achieve the respective objectives.
Growth is the aspiration of every company, so it is necessary to raise the level of mutual objectives, where the company and supplier understand the weak points to be reinforced in the business processes and aim to perfect joint strategies to do so.
The relationship must be based on the achievement of bilateral advantages and benefits, mutually improving and acting in synergy, according to one's own strengths.
The market is constantly evolving, so it is necessary to seize the opportunities it offers, to reduce business risk and raise the quality of services and products.
Finally, it is essential to take advantage of technology and all the new tools available, to have a complete picture of suppliers and quickly analyze the risks and opportunities for both the business and supply chain.
The results of SRM
In light of the above, we can conclude that SRM ensures at least 3 advantages.
Warehouse management and delivery times are optimized, giving the company the ability to react effectively to customer requests and save on expenses. Production planning becomes more efficient, allowing the possibility of cutting unnecessary costs and implementing those services that work best. Finally, waste and errors can be measured and identified, in order to improve the final profit.
If you wish to provide your company with an edge, you need a valid SRM strategy, so as to choose your suppliers wisely and build a profitable and trusting relationship with them. During this process, you can rely on the tools and professionalism of We Are Fiber, equipped with the most innovative and technological services on the market.
Contact us, so that we can find the best way to relaunch your business.