SUPPLIER RELATIONSHIP

MANAGEMENT SYSTEM

Abaigar
Centeno
Ordinante

INTRODUCTION:
Supplier Relationship Management
(SRM) is the discipline of working
collaboratively with suppliers in
order
to
maximize
thevaluederived
from
those
supplier relationships.

AN EFFECTIVE SRM GIVES YOUR ORGANIZATION A

COMPETITIVE POWER TO:
- Work with suppliers to reduce direct and indirect costs and improve service.
- Product/service agreements are developed and managed with key suppliers,
- Goal is to improve the profitability of both the focus company and the suppliers.
- Understand what purchase an d from whom : Purchase order transactions are
integrated with the supply process to improve productivity and all areas of
supplier performance.
- Strengthen t he supply-chain management process by collaborating with your
company and suppliers.
- Select the best suppliers to gain advantage over competitors.
- Assure that your organization's resources are prioritized on the most critical
suppliers.

WHAT IS THE PROBLEM

WITH THE SUPPLIERS?
- Unclear expectations
- Not mutually beneficial (Win-Win)
- Miscommunication
- Poor governance
- Lack of coordinated management

SRM ENCOMPASSES 5
PRIMARY TASKS/ACTIVITIES
1. Segment the Supply Base
Identifying those suppliers with whom the
greatest value creation opportunity exists.
Segmentation of suppliers is one way to help
ensure the proper alignment of resources
within an organization and thereby manage
for value versus managing solely for
performance.

2. Measure & Improve Supplier

Performance
Value from a supplier partnership comes
through innovative and collaborative activities
that focus on solving customer problems.
Supplier performance objectives and
measurements must focus on, and be tied to,
the overall objectives of the business.

3. Become a Better Customer

In order to become a suppliers Best Customer,
it is critical to have a deep understanding of
the suppliers perspective, business objectives
and needs.

4. Collaborate with Suppliers

It is a process where two or more organizations
work together to realize shared goals. This is
more than the intersection of common goals seen
in co-operative ventures, but a deep, collective
determination to reach an identical objective.

5. Improve Supplier Quality

Within a focused and collaborative supplier
relationship environment there is significant
opportunity to bring about improvements in
supplier quality.

SUPPLIER ADDRESS BOOK

CREATION
The Address Book system contains name,
address, and phone numbers for customers,
suppliers, companies, and so on. This
information is stored in several database
tables to create a central repository of
information.

SRM OPPORTUNITIES:
1. EVALUATE
- Supply Strategy Development : Improve visibility
across multiple lines of business to identify and
rationalize duplicate contracts and facilitate informed
negation with vendors
- Supplier Qualification: Reduce risk of supply and
shrink buffer inventory with reliable and expedited

SRM OPPORTUNITIES:
- Supplier Selection: Compress sourcing cycle
times with a variety of auction and bidding
techniques that match supplier capabilities with
sourcing requirements.
- Contract Negotiation and Management:
Collaborate among project teams to edit
documents, conduct meetings and negotiate
business deals while ensuring total security.

SRM OPPORTUNITIES:
2. ENABLE
- Supplier Self Services: Drive supplier participation
and increase responsiveness by enabling suppliers of all
sizes to process orders, generate invoices and update
specifications.
- Content Management: Create, synchronize and
maintain content across your internal and external
supply base to lower the cost and increase consistency.

SRM OPPORTUNITIES:
- Operational sourcing : Increase sourcing process
efficiency by using approved vendor lists to select an
appropriate source of supply for unassigned demand.
- Self service procurement : Ensure compliance
by decentralizing the process while maintaining
central control, allowing purchasing professionals to
focus on managing relationships instead of
transactions.

SRM OPPORTUNITIES:
- Plan driven procurement : Integrate supply
chain management with execution and fulfillment
to automate contract determination and purchase
order generation for materials used in core
business processes.
- Relationship monitoring : Manage total spend
through close monitoring and benchmarking of
supplier relationships and operational performance.