In brief
Supplier relationship management (SRM) is the systematic shaping of relationships with suppliers, from selection and evaluation to targeted development.
Contents
What is Supplier relationship management?
SRM sees suppliers not merely as a source of goods but as partners of varying importance to the company. It covers supplier selection, classification, evaluation, development, risk management and the termination of supply relationships. The term overlaps strongly with supplier management; SRM places the emphasis on actively nurturing the relationship. SRM is also used as a name for corresponding software modules.
A core element is segmentation: strategic suppliers receive regular meetings, shared objectives and development projects, while with standard suppliers the focus is on efficient handling. The basis is formed by KPIs such as delivery reliability, quality, response time and price development, which are discussed in supplier evaluations and annual reviews. It is important that the evaluation is also comprehensible to the supplier.
In maintenance, SRM pays off particularly with suppliers of critical spare parts. A good relationship makes it easier to obtain early information about discontinuations, to be given consideration during shortages, to receive technical support with alternative parts and to resolve complaints quickly. Where there are very many small suppliers, supplier consolidation can reduce the effort of relationship management.
In practice: maintenance and procurement
For suppliers of critical parts, it is worth recording in writing the contacts for urgent cases, escalation paths and obligations to provide information on discontinuations. This makes it clear in the event of a breakdown who responds and how quickly.
Synonyms and abbreviations: SRM · supplier relationship management
Frequently asked questions
What is the difference between SRM and supplier management?
The two terms are often used synonymously. Supplier management generally describes the selection, evaluation and management of suppliers. Supplier relationship management places greater emphasis on the long-term relationship, differentiation according to strategic importance and joint development with key suppliers.
What are the objectives of supplier relationship management?
The aim is to derive the greatest possible lasting benefit from the supplier base: stable supply, good quality, competitive costs and access to innovation. At the same time, risks such as dependencies or supply failures should be identified early. To this end, suppliers are segmented, evaluated and managed with varying intensity depending on their importance.
How are suppliers segmented in SRM?
Suppliers are often classified by procurement volume and supply risk or by their strategic importance, for example into strategic, important and standard suppliers. For each segment, it is defined how often evaluations and meetings take place, which KPIs apply and whether joint development projects make sense.