Resource Origin: GEP

“Supplier relationship management is not a new concept, but it hasn’t always been a formal process. Many companies now have a strategic supplier management program in place. Yet the effort that goes into these programs isn’t always matched by demonstrable results. What can organizations do differently to move toward a supplier relationship management maturity model? We list the best practices.

For years, procurement was seen more as a transactional function — negotiating price and delivery terms with a supplier, putting a contract in place and laying it aside until it was time to renew. It had a relentless obsession with cost-cutting, often losing sight of the opportunities to create better value. That was then. Companies have now realized the many advantages of supplier relationship management — that developing bilateral, trust-based relationships with key strategic suppliers can pay rich dividends (supplier-led product innovation, reduced supply risk, a leaner supply chain, decreased long-term costs, more efficient procure-to-pay processes, greater returns, etc.) and result in a competitive edge for the company if done well. As a result, all best-in-class procurement organizations today have a supplier management program in place. Top-flight procurement teams now strategically plan and systematically manage interactions with key strategic suppliers to maximize the value of those interactions over the relationship’s life cycle…”

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Original Source: https://www.gep.com/blog/supplier-relationship-management-best-practices

Contributors: GEP
Categories: Industry Articles, SIG U Resource
SRC Type: Sourcing Management