SUPPLIER
RELATIONSHIP MANAGEMENT

It is rightly said that Procurement is as strong as its suppliers! And as its corollary, procurement efficiency reflects how good or bad relationship procurement enjoys with its suppliers. However, it does not mean that procurement should have same relationship with all its suppliers. An organisation must dissect its supplier base and apply supplier segmentation tool. Each segment is then managed with appropriate relationship strategy. Group of suppliers in the same segment shall have same relationship with the procurement. Each segment offers unique opportunities of improvement and can be driven though same set of initiatives. SRM starts delivering value when all the cost reduction options are exhausted. Adequate engagement of internal stakeholders across supplier segments is key to derive sustainable value from the supplier base.