SAP Services

Supplier Relationship Management

The involvement of suppliers for innovation in organizations has been a reality for many years. Most organizations consider their suppliers as being one of the most, if not even the most, important sources of innovation. Supplier relationship management can increase the level of innovation-driven procurement, and provides the procurement function in the organization with the tools and technology to make the early involvement of procurement a success

Today’s organizations are broadening their view of key suppliers so that they see them as not simply vendors that they buy things from, but as actual or potential partners who can help them drive competitive advantage. This in turn means expanding the scope of interaction with them beyond purchasing and fulfillment transactions – tapping into their expertise and capabilities to drive innovation, enter new markets, improve quality, exchange insights about marketplace trends, and more. It also means beginning to view relationships with suppliers as assets and to manage them accordingly.

SRM can thus be seen as analogous to strategic account management – which is focused on creating close partnerships with an enterprise’s most important customers. The focus with SRM is on your most important suppliers and how you can build and maintain partnerships with them that provide a high degree of competitive differentiation for your company in the marketplace.

Similar to strategic account management, this involves things like developing 3-5 year business plans with key suppliers and updating them annually; working more closely with suppliers on activities from product development to demand forecasting; and putting in place dedicated relationship managers who spot new opportunities for collaboration with suppliers and marshal the resources required to pursue them.