Supplier relationship management (SRM) is a systematic approach of assessing suppliers' importance and therefore contribution to success for an organisation, Recognising the limited resources available within an organisation, by actively managing those relationships which matter the most, helps to create positive buyer-supplier relationships and determines the appropriate level of engagement with each supplier.
What are the benefits?
Contributes towards better profitability
Ensures appropriate application of resources where it matters the most
Leads to continuous improvement and joint investment (for example, reducing quality defects or leading to service enhancements)
Can improve supply resilience, those with stronger Supplier relationships can respond better to crises
Detailed knowledge of supplier segmentation (based on Kraljic or other strategic criteria)
Development of SRM within ERP solutions such as SAP