SUPPLIER RELATIONS

Contents

What is Supplier Relationship Management (SRM)? Objectives of SRM Tools and Media Applying Tool Set

Role of PR

SUPPLIER RELATIONS

Supplier relationship management (SRM) is a discipline of working collaboratively with those suppliers that are vital to the success of the organisation, to maximise the potential value of those relationships.

Finding good suppliers and maintaining solid relations with them can be an invaluable tool in the quest for business success and expansion.

SUPPLIER RELATIONS

Why SRM?

To level the playing field To extract additional value To stay on top of our game

SUPPLIER RELATIONS

Extract Additional Value

Strategic Demand

sourcing management efficiency

Operating Supplier

relationship management

SUPPLIER RELATIONS

Strategic Sourcing

Consolidate purchasing Client requirements gathering Industry/supplier analysis Create competition Disciplined selection process Effective negotiations Contract management

SUPPLIER RELATIONS

Demand Management

Manage what/when clients can buy:

Order from select catalogue

Monitor use of chosen suppliers

Non-compliance reported

Create process rules

Contracting authority

Create commodity rules

Airline travel booked 14 days in advance

SUPPLIER RELATIONS

Operating Efficiency

Standardized contracts Contract database

Supplier database
Standardized RFP formats Online auctions

SUPPLIER RELATIONS

Extract additional Value

Strategic Sourcing Value Time

SUPPLIER RELATIONS

SRM sustains the value added

Strategic Sourcing Value

Time

SUPPLIER RELATIONS

Stay on Top of Our Game

Regardless of the outcome, top procurement operations continually investigate best practices.

SUPPLIER RELATIONS

Objective

Minimize the risk of supply chain disruptions. Select the best suppliers to gain advantage over competitors. Streamline the supply-chain management process by collaborating with business units across the enterprise. Assure that your organization's resources are utilized in the best manner.

SUPPLIER RELATIONS

Reductions in total product cost, either through streamlining of work processes or replacement of costly components with less expensivebut still effectiveones. Improvements in customer satisfaction. Reduce direct and indirect costs and improve bottom-line profitability. Improvement of products through contributions to product design, technology, or ideas for producing new products.

SUPPLIER RELATIONS

Improvements in product quality. Improvements in "speed to market. Gaining high market value and share.

SUPPLIER RELATIONS

Tools and Media

Supplier Segmentation Accountability

Process and Governance

Technology Value Resourcing Supply Chain

SUPPLIER RELATIONS

Supplier Segmentation

It is a process that involves dividing suppliers into distinct groups with different needs, characteristics or behavior. Segmentation traditionally uses 4 categories: Commodity: Where little or no SRM activity is undertaken as the suppliers provide infrequent one off goods or services

Performance Management: Where focus is placed upon cost and service levels as the supplier is providing off the shelf goods or short to mid term services that are not strategically important and are provided from a competitive market environment

SUPPLIER RELATIONS

Development: Where focus is placed upon continuous improvement to service levels and cost as the arrangements are more mid to long term, with some strategic value Partner: Where strategic long term goods and / or service suppliers are managed to secure supply and drive collaborative engagement with shared benefits

SUPPLIER RELATIONS

Accountability

It basically explain how much the organization stand by its promises.

Process and Governance Organizations often approach process and governance in a one size fits all approach and are yet to tailor processes and roles and responsibilities to the different supplier segments.

SUPPLIER RELATIONS

Technology

Leading SRM organisations are using SRM technology as the change agent to get stakeholders and wider business buy in. Resourcing The three key skills required for procurement to implement successful SRM are: Market & category knowledge cross-functional working commercial & contractual expertise.

SUPPLIER RELATIONS

Supply Chain

It is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers

SUPPLIER RELATIONS

Applying the Tool Set

How we used to think about SRM
Strategic Sourcing Strategic sourcing Demand Management

How we think today

Demand Management
Supplier RelationshipM anagement Buy,Pay,Tr acks

Buy,Pay,Track Supplier Relationship Mgt

Process were Viewed as linear and separate. A Separate dedicated SRM team was envisioned

All process are integrated . No separate COE to hand off.

SUPPLIER RELATIONS

State/Stage of the Relationship

New relationship

New supplier Major shift in commodity purchased

Existing relationships

Healthy Troubled

Non Traditional

Potential for significant reward Fostered by most senior leaders not procurement led

SUPPLIER RELATIONS

Most relationships are basically adversarial, not cooperative alliances

Adversarial does not mean negative! Goals are not aligned Supplier goal is to take buyers money. Their responsibility is to their shareholders Our goal is to keep our money and obtain needed goods or services

Original position - relationships built on trust Revised position relationships built on respect

SUPPLIER RELATIONS

Role of PR

Establish and maintain effective working relationships with Supplier.

Write press-worthy releases, prepare information for media kits and work with internal representatives to disseminate information to supplier about the plans and policies of the organization.
Identify main influencer groups and develop and implement a communication plan.

SUPPLIER RELATIONS

Supervise and grow the role of the PR coordinator with a special emphasis on growing the online channel to drive page views and well supply chain management. Take initiative step to solve the crisis and maintain tempo among organization and supplier.

Take up the quires of the supplier to management and vice versa and play the role of interface.

SUPPLIER RELATIONS

Conclusion

Supplier relation management is very vital for the organization to develop.

Organization has well defined set of objectives for the Supplier Relation Management.
Organization use various tools to maintain Supplier Relation. The role of PR department is very important to maintain smooth and healthy growth.

QUESTIONS?