What is Supplier Relationship Management?
Supplier relationship management (SRM) is the process of identifying the suppliers that are critical to a business and implementing a system of managing relationships with those key suppliers. As supply chains become more complicated, the need to develop clear, measurable ways to evaluate how every supplier either contributes to or detracts from the success of a business is more important than ever before.
SRM is part of an overall supply chain management strategy focused on optimizing efficiencies in a way that is beneficial to all parties. SRM is often referred to as the business-to-business equivalent of customer relationship management, or CRM because many of the principles used in CRM are transferable to the relationship between suppliers and purchasers.
Identifying key suppliers often means creating a supply scorecard — an in-depth analysis of every supplier affiliated with your business. Supplier scorecards are used in a wide range of industries to develop, and maintain, a profitable, metrics-based supply chain.