Finding a Partner For Your SRM Programme

Presented by Steve Carter

If SRM is to work it has to deliver benefits to both sides either by driving out costs, creating better products or services or forging joint-selling arrangements

  Start by identifying your strategic suppliers based on the

importance of the item and the complexity and risk in buying. Then look at the suppliers and their view of the market and your account. Are you strategic for them as well?

Once you have identified potential partners for SRM, baseline the current relationship to check that any gaps can be closed and are not deal breakers.

Introduction

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Values are the behaviours you expect when conducting business.

  For example, if you want a close and productive

relationship but the other party shows you through their actions that they are adversarial and distrusting then you are unlikely to have a worthwhile SRM programme with them

Make a list of all of the behaviours you would want to see before starting SRM and then test them by observing your chosen suppliers in action

Look for similar values

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Business goals are targets that you set for what you want to achieve and how you are going to get there from your starting point.

  If your intended SRM partners have different goals to yours

then it might make it impossible to have a meaningful SRM programme.

Goals that at first sight look incompatible could be re-framed to make them supportive of each other. For example, you might have a goal to reduce costs and your supplier one of increasing profits. These might be reconciled with a plan to increase the range of services the supplier provides to you and a corresponding agreement to reduce unit prices as the same fixed cost is amortised across a bigger revenue base.

Identify common goals

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Look for areas in which you might collaborate in order for you both to increase business.

  Do they have technology that will enhance your offering to

your potential customers?

Can you provide an opportunity for them to prototype products or services in a low risk environment?

Do you have complementary processes or technology that will enable you to merge functions and reduce costs?

Create mutual value

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Make sure they have improvement capability. It is one thing to have a desire to improve processes and drive out waste for example. It is another to have the capability to do it.

  Ask for examples of how they have achieved this in the

past.

Do they have the tools to deliver improvement such as qualified Six Sigma practitioners or experience of Lean design?

Identify improvement capability

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Benefits for you come often from reducing costs and reducing supply risk. For this to be significant for you, your suppliers need to supply items that are in your strategic category.

  SRM works when there is something in it for both parties.

This is more likely to be the case if yours is a strategic market for them.

Make sure you are an important client for them. Strategic relationships are intensive and demand significant time and effort. For a supplier to invest this in you they need to believe that you are important to them.

Are the market and you strategic?

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Want to know more … ?

Go to http://bit.ly/1cJ26sz and claim your copy of my new e-book

“Power Partners – How to unlock real and lasting value with your critical suppliers”

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