Management
Supplier relationship management (SRM) is a subject that is used to plan strategically and manage interactions involving third party firms that supply products in order to make good use of the interactions. It involves collaborating with suppliers to reduce risks and uncover new value. It is a wide assessment for suppliers’ abilities to offer their services in order to decide which activities to engage with the suppliers. It helps in developing a relationship that is two-way to benefit both.
SRM helps in attaining greater levels of innovation, as well as a competitive advantage for the companies. Just as businesses develop customer relations, they also need to develop a nice relationship with their suppliers. This is of great value as the company will get an assured supply of goods when they have developed a concrete relationship with suppliers. SRM focuses on a joint creation of value that is based on trust.
A company that applies SRM gets value in reducing cost. Cutting cost is one of key things in growing a business. It contributes largely in reducing costs. A company that uses SRM has security of supply due to the good relationship that I created between the business and the supplier. Supplier relationship management harnesses talent and ideas from crucial supply partners. This is then translated into offering products and services to customers’ satisfaction.
SRM delivers an advantage for competition with other businesses. It helps in balancing a scorecard for competition. Implementing on SRM helps in saving. For successful implementation of SRM, it is essential to achieve several prerequisites. These include, tracking the progress of the benefits that are intended. There is also a need for strategic coherence. The system can, therefore, be used to improve efficiency by implementing its objectives.
