Supplier relationship management
Are your relationships within your organisation focused on optimum supply chain management?
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Supplier Relationship Management (SRM) centres heavily on the interpersonal dynamics in a buyer / seller relationship. Consequently the consultant will need to be familiar with the following product areas that are primarily ‘owned’ by NRI / Skills Development:
- Assertiveness (what it is and is not, assertion skills)
- Strength Deployment Inventory (SDI)
- Negotiation skills (as applied by supply positioning)
Product definition
Delivering a sustainable step change in the management of external relationships will:
Secure genuine competitive advantage through the effective management of external supplier relationships, recognising what a "good" relationship looks like.
Ensure the buying organisation presents a single image to the selling organisation in line with the identified sourcing strategy (i.e. act, communicate and behave consistently).
Provide a stable platform for performance and value enhancing initiatives both jointly (with suppliers) and separately.
Deliverables
A clear understanding of the current relationship ("as is" scenario) in existence between the buying and selling organisations. This to include:
- Assessment of the ‘relationship compatibility’ through market management matrix analysis
- Relationship maps showing who and how individuals in the client engage with the supplier
- An assessment of the performance of the supplier in both hard and soft measures at all levels in the client structure
- An assessment of the performance of the client as viewed by the supplier
- Identification of the actual stage of relationship as determined on the five stages of the relationship spectrum
A clear picture of the required features and resultant benefits that is sought by the client organisation (i.e. "to be" scenario) and how this shapes sourcing strategy with suppliers.
A relationship strategy that provides a vehicle for structured changes within both the client and supplier organisation such that the resultant outcome delivers against a jointly agreed (client/supplier) congruent suite of expectations. (i.e. the strategy to move from the "as is" position to the "to be" position).
An implementation plan that installs the strategy in both the client and supplier organisations such that the performance of both organisations is consistent with expectations at all levels in the hierarchical structure.
A ‘flight deck’ of measures under the concept of a balanced business scorecard that will clearly demonstrate the success of the relationship and highlight opportunities for further development and incremental performance gains. Such measures will be jointly agreed between the client and supplier and represent two-way measurement (i.e. both organisations).
A robust framework upon which a continuous improvement ethos can be nurtured and developed in four key areas:
- Improved customer focus
- Seizing cost reduction opportunities
- Enhanced value proposition (from supplier to client and client to customer)
- Improved processes
Simply "avoiding disillusion and delusion through the management of clear expectations".
Note
The above deliverables are primarily focused on existing client/supplier relationships, as this is often the scenario within which supplier relationship management is developed with a client. However, other than the first deliverable (the "as is" position) much of the above deliverables can be set for new supplier relationships the client may be seeking.
In summary the output of supplier relationship management is to ensure any identified sourcing strategy (for example as may be developed through a SASP) is aligned with an appropriate relationship strategy.
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