SRM in Supply Chain Management


Supplier relationship management (SRM) is a business initiative that many companies undertake to build mutually beneficial relationships with suppliers. Well-designed SRM programs help companies to increase collaboration by identifying the right suppliers with whom to partner.

Supplier Relationship Management Benefits

  • Reduced costs
  • Better-managed risks
  • Enhanced supplier responsiveness
  • Improved visibility
  • Use of suppliers’ full capabilities

Supplier Relationship Management (SRM) Process

  • Segment your Suppliers
  • Create a Supplier Strategy (Not every segment should be managed the same way, and not every supplier within a segment should be managed the same way.)
  • Execute (and Monitor) the Strategy 
  • Improve Supplier Quality

Supplier Segmentation Methods 

  • Product or service type 
  • Ideal relationship type 
  • Supplier capabilities 
  • Customization versus standardization 
  • Level of innovation 
  • Lead times 

Practical Tools To Use

  • Kraljic Matrix
  • 10 cs of supplier evaluation
  • Demand Profiling Matrix

Read also:

Resource Person: Asmaa Metwally

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