Supplier Relationship Management

Once a new contract is put into place, the real work begins - ensuring that your organization realizes the expected benefits. Too often, though, attention shifts to sourcing of other agreements – leaving the organization unable to assess whether suppliers are meeting deliverables, service-level agreements or other contractual terms.

Supplier Relationship Management (SRM) – a core part of an effective sourcing and procurement strategy – is the process, organizational framework, and practices by which an organization conducts ongoing interaction with its supplier base. It drives value to the organization through improved supplier performance and reduced costs, producing benefits such as these:

• Organizational visibility into preferred suppliers, reducing maverick spend and consolidating the supply base
• Supplier performance reporting and score carding to identify improvement opportunities
• Increased leverage for ongoing supplier negotiations with consolidated performance data
• Clear expectations for supplier performance (supplier and end user)
• Incentives for suppliers to exceed performance standards through a tiered preferred supplier programs
• Identification of cost savings opportunities through expectations agreements and tiered management
• Reduction in lost savings through compliance monitoring
• More efficient alignment of resources through adoption of program process and procedures
• Dedicated ownership of supplier relationships
• Supplier recognition and awards programs

Post-contract measurement and reporting.

Supplier relationship management is focused on post-contract measurement and reporting compared to pre-established service level agreements. Key components include supplier tiering, clearly defined roles and responsibilities, performance data capture, surveying, and reporting tools.

Historically, SRM efforts focused on supplier collaboration to reduce costs in the supply chain. More recently, financial services organizations, state governments and other types of organizations have adopted SRM strategies in order to monitor compliance with procurement and regulatory requirements and monitor supplier performance in a consolidated manner.

Experience and tools to address a variety of needs.

Claro Group professionals have helped a variety of financial services, public sector, manufacturing, and professional services organizations apply SRM strategies to address critical challenges:

• Large supply base without identified preferred suppliers
• Limited ability to provide consolidated supplier performance reporting or scorecards
• Multiple uncoordinated supplier relationship owners within an organization
• No clearly defined performance management polices, processes or requirements
• No supplier recognition or awards program
• Lack of specific roles and responsibilities related to supplier management

Our team designs and implements SRM programs based on each client's unique requirements – needs that range from contract governance, to supplier performance measurement, to internal resource allocation. We work with you to define program goals, determine the most appropriate approach, and leverage our tools and experience to implement a sustainable SRM program.

Please contact us for more information about The Claro Group's Sourcing and Procurement Solutions.