Supplier Relationship Management New Year Resolutions

Posted 15th Jan

I’m going to be better at SRM in 2018 and here are the five areas I’m going to concentrate on to do that.

1.  I will segment my supplier base properly

Understanding the sorts of approach to take with my suppliers is a challenge - I need to get them segmented properly so I’m applying the right amount of limited resource to the suppliers I have. The challenge is that this can be dynamic, particularly in the boundaries between different types of suppliers. As an example, I have a supplier who can, if well managed and motivated, help with a key part of delivering my businesses overall strategy. However, If I don’t push and cajole, they will still be important, but not requiring anything like the amount of effort as a strategic supplier. I need to make sure they are in the right place. Equally, I don’t want to be spending time working with a supplier who really isn’t significant at all. As a consequence, I’m going to keep challenging the categorisation of my suppliers to make sure the approach I’m taking is optimal both for the output I get and for the effort I have available to put in.

2.  I’ll be hard on strategic suppliers

For all the effort they take to manage properly, I need to make sure that my strategic suppliers are actually delivering the strategic value which I need. In short, I will look closely at which areas the supplier is working with us to deliver strategic value and make sure there is a well-structured and resourced program in place to deliver that value. I will also recognise that this may be an issue with our side being able to work at a pace that allows that strategic value to be delivered. If this is the case, I will work closely with my stakeholders to make sure the opportunity and need for commitment is clear. If none of that works out, I will return the suppliers into the ‘performance’ category and work with them in a less intensive way.

3.  I’ll measure something that matters

I have lots of KPI’s with suppliers and I really need to make sure that all the effort put into capturing the measures is worthwhile. I will start by testing if I am measuring the right thing with a supplier and look to see if I can measure less. This might mean that I become more focussed on the outcomes rather than the inputs, even though that could delay response to a problem happening. I do really want those outputs to happen, so making sure they are available is important to the business. Conversely, I’ll stop measuring things I don’t care about.

4.  I’ll do something with the measurements

Lots of effort goes into measuring performance. Once the measures are available, I’ll work on them and with them and look for improvements and benefits that can be linked to the use of measurement - I’ve got to make sure it’s all worthwhile!

5.  I’ll invest in the right relationships

Where there is a good supplier relationship, focused on the right areas, I’ll make sure that I’m investing in it properly. I’ll be prepared, I’ll have areas to focus on, I’ll be chasing and concluding actions, I’ll be making sure our side is doing all it needs to, and I’ll be making sure the supplier team is delivering their stuff too. I’ll run proper governance and I’ll make sure the deliverables are delivered.

If I focus in these 5 areas, I’ll get more results from my supplier relationships and deliver more value for the business.

To find out more about SRM, have a look at our website at Supplier Relationship Management .

Tagged by topic: Supplier Management

  by Mark Hubbard

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