Other than purely local transactions, our business relies on varying degrees of Supplier Relationship Management. We may not know it as SRM and we may not recognize it as that discipline but if we have ever entrusted the care of a valued customer into the hands of a trusted supplier, then we were engaging in SRM.
For some of us in the relocation industry that act as forwarders, transportation service providers, move management or relocation management companies, the quality of our SRM defines the quality of our service. The larger Relocation Management Companies may have led the way but the strategic selection, monitoring and management of supplier relationships has become critical to success for most companies.
For corporate clients that sponsor mobility services on behalf of their transferees, the critical importance of SRM is obvious. Our joint mission is to deliver focused, productive and engaged staff members to their new assignment and the best examples of success in delivering on this mission are also the best examples of partnership between client and supplier.
Some of the critical steps towards ensuring success in a supplier relationship are:
Embedding SRM into the procurement process
Pricing, quality determinants, capability, financial stability and experience are all important criteria in the purchasing decision but what weight is given to the characteristics of an organization relative to their suitability and sustainability for a long term, mutually successful relationship? New supplier selection is a costly investment. Ongoing process, efficiency and quality improvements drive the dividends from those investments.
While some organizations may go through an infrequent RFP selection process, other organizations must make partner selection decisions daily due to the ever changing nature of their business. Effective tools must be identified to search, filter, diligently qualify and document before engaging new suppliers.
The process only starts with selection. Onboarding a new supplier partner is as important as the process of onboarding a new client if we are to take a long term, relationship-based approach to supplier management.
Aligning enterprise objectives into the supplier relationship
Clearly articulate these objectives into measurable determinants which are reflected in Service Level Agreements. Incentivize performance through favorable business distribution to the partner that best meets enterprise objectives.
The client and the supplier must commit to disciplined and effective communication to reconcile objectives to the measurements of key performance metrics with a goal of ongoing improvement. Quarterly reviews must not degenerate into rote, required exercises. It takes leadership to keep the focus on continuous process and quality improvement by investing in the relationship.
Leveraging Technology & Process
In order to achieve continuous improvements, the participants cannot get mired down in the mechanics of monitoring, measurement and reporting. Implementing technology to enhance efficiencies requires a tremendous commitment on the part of the client in the relationship. The supplier partner has a role to play and may even be required to drive the technology and process improvements but the client cannot take a passive role. They must be just as committed to participating in the process in the spirit of true partnership.
In conclusion:
The ability to communicate openly and honestly is one of the qualities inherent in most successful relationships and successful SRM is dependent on it. It may be time to make a brutally honest assessment of your SRM program, especially the communication part.
- When was the last time that you communicated?
- What was the nature of the communication?
- Was there an effort to establish a personal connection and enhance the relationship in support of your enterprise objectives?
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If you are honest and you are like most of us, you will see some immediate opportunities.
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