In brief
Supplier management covers the selection, evaluation, development and steering of suppliers throughout the entire business relationship.
Contents
What is Supplier management?
Supplier management, internationally also known as supplier relationship management (SRM), regards suppliers not merely as a source for individual orders but as long-term partners whose performance is measured and improved. The phases range from supplier search and qualification through contracts and ongoing evaluation to development or, if necessary, separation.
Typical evaluation criteria are quality, delivery reliability, price, responsiveness, communication and, increasingly, sustainability and compliance, for example under the German Supply Chain Due Diligence Act (LkSG). Supplier audits, KPIs and regular reviews form the basis. This is complemented by risk management, which keeps an eye on financial, geographical and dependency risks.
In the MRO area, the supplier base is often very large and fragmented. There, supplier management frequently aims first at transparency and consolidation: fewer, but better managed suppliers with clear agreements. Digital supplier portals and shared master data make it easier to exchange certificates, evaluations and complaints, and make the development of individual suppliers traceable over the years.
In practice: maintenance and procurement
For spare parts suppliers, response time to enquiries, on-time delivery and complete documentation are often more important than the unit price. These criteria should be explicitly weighted in supplier evaluation.
Synonyms and abbreviations: supplier relationship management (SRM) · vendor management · supplier performance management
Frequently asked questions
Which phases does supplier management comprise?
A typical cycle consists of supplier analysis and search, qualification and selection, contractual integration, ongoing evaluation and development. If a supplier shows persistent weaknesses, an orderly termination of the relationship can also be part of it. Risk management accompanies all phases. How intensively a supplier is managed usually depends on its importance for supply and on the purchasing volume.
What is the difference between supplier management and supplier evaluation?
Supplier evaluation is a tool within supplier management. It measures a supplier's performance against defined criteria, such as quality, delivery reliability and response time, and often summarises the result in a score. Supplier management is the broader framework: it uses the evaluation results to select and develop suppliers, adjust contracts or restructure the supplier base.
How can supplier risks be identified early?
Indications are declining delivery reliability, more frequent complaints, longer lead times or sluggish communication. In addition, financial indicators, dependencies on individual sites or sub-suppliers and changes of ownership are monitored. It helps to classify suppliers by their relevance to supply and to monitor the critical ones more closely. For parts with only one source of supply, fallback options should be examined before a shortage occurs.