Effectively manage your supplier relationships

Strong and long-lasting relationships in business are key for success, whether this is with internal stakeholders, colleagues or senior leaders, or with customers and suppliers. In procurement and supply chain, supplier relationships are especially important, which is why effective supplier relationship management (SRM) is fundamental to develop and maximise the value of these key interactions.

So why should you ensure you have the right people managing your supplier relationships and how can you be sure that your SRM programme is being effectively implemented in your business?

Why is SRM so important?

An SRM programme includes both business practices, processes, systems and software. True SRM has the potential to bring about enormous benefits through driving real collaboration and opportunities from a partnership. 
SRM enables companies to maximise value and ensure supplies are kept to the highest quality, delivered on time and at the best price. Cost-quality and delivery are all subject to the relationships that your forge and nurture with your supplier. Your investment into managing a clear structure for your SRM process, and the relationships your business manages, will ultimately benefit your deliverables. 

Who is responsible for SRM in your business?

Depending on the size and complexity of your business, the benefits of SRM will differ and so too will the resources allocated to the management of your relationships. Small businesses will need to incorporate supplier relationship management into the key responsibilities of their trusted supply chain manager. However, larger organisations will often need to hire dedicated professionals, implement processes and invest in systems to ensure the effective management of these relationships. 
Essentially, in smaller businesses, all roles involve an element of SRM but for larger businesses, as the number of suppliers grows, there should be a dedicated team involved in the management of supplier relationships. In addition to this, the more senior the role is in a business, the more SRM is involved.

Hiring talent to manage supplier relationships

Brexit and fluctuating exchange rates have meant that goods and/or services being imported have been exposed to constant price changes. It is the skills of a top procurement professional with experience in managing supplier relationships that allow businesses to mitigate the risk associated with uncertain markets and sometimes, keep prices down.
Looking forward, SRM will play a key role in maintaining the longer-term sustainability of companies operating in procurement and supply.  
Your SRM programme simply will not work if it is not managed by skilled and confident professionals. Positive supplier relationships directly rely on the people you hire to manage them. This means that a comprehensive recruitment process is vital and there are a number of key skills to be on the lookout for when recruiting for such positions.
  • Communication skills
  • Problem-solving
  • Strong stakeholder management skills 
  • Stakeholder engagement techniques 
  • A structured approach to KPIs
  • Accountability 

Technology in SRM

The constant evolution of technology has facilitated global and more accessible connections for SRM. Interactions can be carried out electronically, at any time, from anywhere and relationships can be managed from the other side of the world if need be. 
One such example, which is already widely used, is Skype. The adoption of Skype in SRM has allowed businesses to communicate with suppliers more frequently and be more personable, therefore improving relationships and keeping key contacts engaged. 
Looking forward, as well as current KPI-led modules, in most modern ERP systems that collate data of both past and current performance, automation and AI will play a key role in SRM. Chatbots particularly, have massive potential to become 24-hour problem solvers that could immediately solve many remedial supply based issues including, compliance, PO issues, audits and any other paper-based checks.   
The potential of new technology in SRM is great and relatively unexplored but if you are investing in newer technologies now, then you will also need to consider this when hiring for an SRM-focused role. Regardless of the level of technology in your organisation, then it is likely to be on the cards moving forward so while those with experience in AI and/or automated processes will be valuable assets, it is also important to invest the time into upskilling your team as these changes occur. This can ensure that 
If you’re looking to improve your SRM programme, why not get in touch to see how we can help source the right talent for your team? Alternatively, submit a job spec and we will give you a call to discuss your hiring needs.
Rob Bales
Operating Director
T: +441212309381