Supplier Relationship Management
Supplier Relationship Management or SRM is a systematic and segmented supplier management approach with the goal of cutting cost and boosting profit.
Contract Management is one of the most important tasks of Supplier Relationship Management.
SRM consists of 3 main activities:
The sourcing process covers the supplier selection process and related contract development. Frequently the overall goal of this activity is to reduce the number of suppliers, in order to manage the suppliers more effectively.
2. Contract Management
SRM is about managing the ongoing contracts more intensively. As a start you will need a central view on all contracts, which is called contract administration. It is the activity of centrally capturing and monitoring contracts.
Contract Management on the other hand is the activity to ensure the contractual agreements are executed as agreed. The main tasks are performance and relationship management. It is a segmented approach and depending on the importance of the contract, people spend more or less time on each task.
Contract management activities can be categorized into three areas: service delivery management, relationship management and contract administration.
Service delivery management refers to delivering a great service to all internal stakeholders. To achieve this, the contract manager will have to build sound relationships with all relevant stakeholders, which is relationship management. Contract administration refers to developing appropriate procedures and filing all relevant documentation.
3. Supplier Development
Here procurement works with a limited number of suppliers to continuously improve or develop new products/services to gain competitive advantage. As it requires much effort from both parties, only a few suppliers and contracts will be selected for such supplier development activities.
Supplier development is really about improving the capabilities and performance of existing suppliers. Ideally, when executing supplier development programs, both customer and supplier work in harmony to perform better and quicker.
Read more about the Competences:
|Strategy Development||Category Management||Finance Management|
|Cost Management||Sourcing Process||Negotiation|
|Legal||Performance & Contract Management||Operational Procurement|