If you’re in Procurement, you’ve probably heard the term “supplier relationship management” or “SRM”.

 It has several aliases, too. Supplier Performance Management, Strategic Supplier Management, Supplier Development, or any combination of those. There’s no standard definition.

 But what does it actually mean? It can be shrouded in mystery to those that aren’t part of the Procurement inner-circle!

 Let me debunk some of the mystique though. No matter what it’s called, the purpose of the activity is simply to create more value from the relationships with your suppliers, whether that’s reduced risk, reduced cost, increased innovation, or decarbonization to meet your emissions targets, for example.

 Organisations typically spend anywhere between 30% (in the services sector) to 80% (manufacturing sector) of their revenues with 3rd party suppliers. So it makes sense to try and maximise the value that your company gets from these supplier relationships, doesn’t it?

 Your expectations of your important suppliers should go way beyond them simply meeting the requirements on your purchase orders.

 You do this by carrying out tailored interventions with your most important suppliers to generate the results that meet your specific business requirements.

 It’s not an activity that can simply be switched-on at the flick of a switch though. It needs organisation-wide support, thorough planning AND supplier buy-in, among other things.

 The results of implementing SRM can be hugely beneficial to your business though, and you can unlock hidden value that can create a competitive advantage for your company.

 I’ve successfully created, led and run supplier relationship management programs, so get in touch if you think I could help your company.

Meanwhile, here’s a video on the topic.