The benefits of supplier relationships management: real or fictitious?


I must admit I am not the biggest fan of fluffy things in the world. Theories, tools, systems by themselves are neither good or bad (that is why i say “fluffy”). It is about what you do with them and how good you are in what you do. Claiming, that a company has SRM in place or that you have supplier evaluation and feedback system in place does not mean much. “So what?” is a crucial question to answer. Does it bring benefits to the business? Does it REALLY make a difference?

There are companies who implement tools because someone “said so”. It might be certification organisations, big customers, auditors. Others rush to adopt new systems, because they are chasing the fashion: competitors, “market”… “Just because” can also be a reason. The systems become deeply embedded into the company. Well, at least, drawers of the desk. And the biggest benefit it brings – prevents from more systems and tool being implemented into the same drawers – because they occupy space.

On the other hand – do you need SRM in place to treat your suppliers like human beings, like business partners – with respect and honesty? Probably not. If you really put effort into any relationship – it works. It works better, when communication is proper, when information exchange is consistent and open, goal-oriented.

And here is the trick – as soon as you start working hard with a bigger number of suppliers to maintain and develop relationships, to achieve mutual goals – you start needing help. This is when tools and systems come into hand. They are there to help you do the job that needs to be done. Or the job that you would be doing anyway, without even having a system.

Let’s get back to the initial question: can we measure “good relationships”? Do they give any benefits?

Let me give you an example. We were having negotiations with global services company.  We needed several Europe-wide spread businesses to be put on the same pricing matrix – let’s call it “special”. Unfortunately, two of our twenty-many locations had signed a deal before the central procurement got their hands onto the subject. Therefore the supplier’s global account manager implemented the “special” pricing for everyone BUT those two (biggest spend) locations. Where is the “good relationships” you ask? Well, one of our team members had good relationships with the supplier’s local account manager. He did not use any systems or tools – simple calls, honest conversations, open position regarding the overall situation. The outcome was very creative: the local account manager proposed to review the contract that was signed three months ago and was supposed to last for three years. She could not put “special” price list in place – because it would have to go through central sales team for approval and we were once rejected there already. However, she agreed to match the prices of the “special” price list. In other words – we got everything we wanted, but under a different name. And everyone was happy. So here is your answer – Ka-ching!

Do you have any samples of situations when good relationships with supplier brought you benefits? Please do share them in comments!

Thanks for reading!



The benefits of supplier relationships management: real or fictitious?

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