Supplier Relationship Management

Definition:

"Supplier Relationship Management is a combination of technology and best practices that provides the information that enterprises need to purchase essential products and services in ways that enhance profitability." This represents an extension and broadening of the concept of supply chain management.

Advantages to using the Internet in SRM:

• "Provides standard, economical information and document exchange for all suppliers.
• Speeds transmittal of product specifications, blueprints, design revisions, bills of material, and price quotes.
• Reduces opportunities for errors
• Provides a more level playing field for suppliers" of all sizes

Functions included in SRM:

• e-Procurement
• Purchasing
• Portals
• Spending analysis
• Strategic sourcing
• Supplier performance

Possible Impacts on Profitability:

Improve revenue

• Reduced customer delivery cycle times
• Improved quality
• Increased margins & market competitiveness

Reduce cost

• Eliminate non-value added layers & processes
• Leverage contracts and discounts
• Streamline payment processes

Improve efficiency

• Reduce administrative time
• Standardize processes
• Compress procurement cycles

Increase visibility

• Track and utilize quality resources
• Monitor supplier effectiveness
• Leverage historical information

Source: Deliver Profits From Supplier Relationships. AMR Research, PeopleSoft, Internet World. October, 2002.

- R. S. Kulzick - 10/12/2002 -

Contact rkulzick@stu.edu with questions or comments about this web site.
Copyright © 2002 Raymond S. Kulzick - Last modified: September 13, 2008