Growing and evolving great supplier relationships is crucial to any business model. Building those relationships can be tougher than anticipated, but using an SRM platform can make it infinitely easier – and scalable.
Sales teams have CRMs (Customer Relationship Management platforms) to manage the complexities and dozens of points of contacts with individual clients. Likewise, it’s likely that, to make the most out of your supplier relationship, you need an SRM or top supplier relationship management software, to organize the supplier relationship lifecycle.
Benefits of Collaborative Relationship Between Buyer and Supplier
The idea of strategic relationship management in purchasing isn’t new, but, in terms of age, it’s merely an elder millennial.
The idea was coined in 1983 by Peter Kraljic in his article “Purchasing Must Become Supply Management” published in the Harvard Review.
In short, the article was a call to shift perspective “from purchasing (as an operative function) to supply management (a strategic one).” In other words, rather than acting as if these interactions are single-purchase events separate from strategy, they should be treated the same way that businesses treat clients – with a more personal flair and the goal of providing mutual perks for a long-term business arrangement.
Just short of 40 years later, full software programs have been developed to nurture this unique relationship, helping companies make stable, sound choices in suppliers, maintain a healthy vendor mix, and manage risk profile.
Ultimately, the relationship between you and your suppliers is mutually beneficial, and successful relationships that promote quality, efficiency, and innovation can lead to reduced spend, maximized value, and a consistent supply chain. In other words, a competitive edge.
You can mitigate the challenges facing the buyer-suppler relationship by investing in an SRM (supplier relationship management software), which can make the difference between smooth, advantageous buyer-supplier relationships and tumultuous, uncertain ones.
3 Ways Using Top Supplier Relationship Management Software Can Support Your Supplier-Vendor Relationships
1. SRMs Can Assist in Choosing Suppliers That Align with Your Values
Much like personal relationships, business relationships will always struggle if there is a disconnect. Establishing a clear method of communication and standard practices when it comes to handling inevitable situations with your supply chain is crucial to building long-term confidence both ways.
It’s even worth switching suppliers if you realize during the initial groundwork that you don’t see eye to eye. It’s important to consider a supplier’s character, morals, integrity, and communication style so that you have all the necessary information before entering a long-term relationship with them.
SRMs, with an eye on Coupa here, can lend a hand in this by mitigating third-party risk, accelerating supplier onboarding, and providing continuous monitoring of partner health.
How a relationship starts can be a huge indicator of how it’s going to continue. Coupa allows you to provide a simple onboarding experience and perform deep risk assessments. Using AI-empowered insights to monitor data sources, cross-community behavior, and user-submitted performance feedback which you can review in one convenient space.
Have a Diversity, Equity, and Inclusion (DE&I) goal? SRMs can play a key role here. Coupa identifies minority, woman, veteran, or LGBTQIA+ owned businesses (and more), to help you manage your company’s diversity goals.
That’s some top-notch, strategic supplier-buyer relationship, right there.
2. SRMs Help You Be the Customer You Wish to See in the World.
To build and maintain a good relationship with your supplier it must be understood that supplier relations are a two-way street. You need information from your supplier to keep an accurate pipeline of components and/or products, while your supplier also needs information from you. This can vary depending on the industry and supplier, so it’s important early-on to have a clear understanding of the information transfer between both parties.
Additionally, on-time payments are another key component of keeping a good status with your supplier. This allows them to take on less risk when working with you and directly assists the supply chain while maintaining solvency. To alleviate the stress of manually handling every step in the procurement to payment pipeline, we recommend looking into advanced spend management solutions such as Coupa Pay.
The last key recommendation on being a great customer is to keep accurate internal records. Asking suppliers to re-send quotes or invoices is a pain. Over time, this disintegrates your standing with them as a competent client. Create a system to track your supply chain and you’ll never have to worry about hurting your relationship with your supplier.
Ultimately, fostering the relationship, making the business exchange a pleasurable experience, will be beneficial down the line for both you and your supplier.
3. SRMs Facilitate Open & Often Communication.
Pre-COVID, manufacturers expected roughly 50% of their purchase order lines to change from the time of purchase to receipt of the order. Now imagine the increase post-COVID.
Increased communication is more crucial than ever, and SRMs provide you with a wealth of information and facilitate strategizing ahead of time so you can provide better information for your suppliers sooner than ever before.
Rather than being passive with touch and go emails or a quick phone call every quarter, be active in your communication with your supplier. Set up regular check-ins to go over things that are working well and areas in which either party can improve – which you can easily see from your SRM relationship health page.
A change in plans is something that suppliers are familiar with but that doesn’t mean they should be receiving a sudden change without notification. Maintaining a cordial email relationship is ideal for small changes but adding the personal touch of a phone call is nearly always appreciated to handle questions right then and there.
When it comes to large-scale changes, the earlier your supplier knows about change, the easier it is for them to prepare accordingly. Be upfront before the decision is even made because honesty is the quickest way to build trust and loyalty over your (hopefully) long and fruitful relationship.
Coupa, a Top Supplier Relationship Management Software
A few advantages of Coupa have been touched on, but there are many more reasons to move your supplier relationship management to this trusted cloud program.
Coupa is a Business Spend Management software with a larger umbrella that includes SRM. The Coupa Platform unifies supply chain, procurement, payments, and treasury into one real-time dashboard that can be leveraged by stakeholders across the company.
It not only revolutionizes the way that you manage and maintain the supplier-buyer relationship, but can have the coveted Organizational Effect, creating a more collaborative, unified business all around.
Ready to talk about SRM (Supplier Relationship Management)? Reach out to John Rhee at [email protected].