Supplier relationship management - Wikipedia
One of the biggest challenges in healthcare is cost containment. He holds his PhD in the area of healthcare supply chain management. We also dropped several issues in this year's survey — a decision based on feedback from our Supplier Relationship Management Trends. “Other challenges in the supply chain include the absence of good quality spend and . develop supplier relationship management frameworks and capabilities.
Organizational structure[ edit ] While there is no one correct model for deploying SRM at an organizational level, there are sets of structural elements that are relevant in most contexts: A formal SRM team or office at the corporate level. The purpose of such a group is to facilitate and coordinate SRM activities across functions and business units.
SRM is inherently cross-functional, and requires a good combination of commercial, technical and interpersonal skills. Such individuals often sit within the business unit that interacts most frequently with that supplier, or may be filled by a category manager in the procurement function. This role can be a full-time, dedicated positions, although relationship management responsibilities may be part of broader roles depending on the complexity and importance of the supplier relationship see Supplier Segmentation.
Building the Business Case for Supplier Relationship Management Investment
An executive sponsor and, for complex, strategic supplier relationships, a cross-functional steering committee. Effective governance should comprise not only designation of senior executive sponsors at both customer and supplier and dedicated relationship managers, but also a face-off model connecting personnel in engineering, procurement, operations, quality and logistics with their supplier counterparts; a regular cadence of operational and strategic planning and review meetings; and well-defined escalation procedures to ensure speedy resolution of problems or conflicts at the appropriate organizational level.
Further, suppliers can be segmented by the degree of risk to which the realization of that value is subject. Executive-to-executive meetings Strategic business planning meetings, where relationship leaders and technical experts meet to discuss joint opportunities, potential roadblocks to collaboration, activities and resources required, and share strategies and relevant market trends.
Joint business planning meetings are often accompanied by a clear process to capture supplier ideas and innovations, direct them to relevant stakeholders, and ensure that they are evaluated for commercial suitability, and developed and implemented if they are deemed commercially viable.
Operational business reviews, where individuals responsible for day-to-day management of the relationship review progress on joint initiatives, operational performance, and risks. Probably yes, because no one would trade with anyone else if both sides did not gain something that they valued from the exchange relationship.
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Whether we like it or not, whether we want to say that out loud or not, buyers and suppliers primarily indulge in exchange relationships in order to satisfy their desire for money and to benefit their businesses or organizations.
So when buyers and suppliers think about supplier relationship management or ways in which they conduct exchange relationships, they must focus on a share of value appropriated by both sides in the relationship.
Building the Business Case for Supplier Relationship Management
What is Supplier Relationship Management? Over the years effective management of supplier relationships has emerged as an essential organizational competence, and should be used to identify the right projects and the right supplier to maximize output from the available resource.
Supplier relationship management can be described as the systematic management of post-contract value from relationships with suppliers over the life of selected key relationships. Supplier relationship management may become one of the few real core organizational competencies. There has been a great deal of research done on the subject of supplier relationship management in operations management; however, in my view, there are two strategic ways companies can improve supplier relationship management.
2 Strategic Ways to Improve Supplier Relationship Management - Spend Matters
Category or Commodity Strategy Krause2 has suggested the identification of critical commodities for development as a first key step of a strategic supplier development process. After classifying all commodities into each category, the resulting portfolio discriminates between non-critical commodities and strategic commodities.Supplier Relationship Management - Process & Tools in Supply Chain Relationships - AIMS Lecture
Classification matrix for commodities source: Therefore, if companies use proper commodity strategy, then they can focus resources on what is important for them and drive many improvements. Either the top management or a small group in a purchasing and supply chain organization translate this recognition of the need into a set of objectives dealing with various performance measures such as cost, quality, delivery performance or strategic objectives.
The main input to formulate these objectives comes from technical capability, costs, quality and delivery performance from existing and new suppliers, customer requirements and competitive challenges in the marketplace.