Supplier relationship management (SRM) is a critical component of managing supply chains that involves evaluating interactions between the company and its suppliers to determine whether the relationship is stable, secure, and benefiting both sides. Supply chains can be complex and varied, requiring understanding and insight to manage them effectively. With the average number of suppliers for a company sitting at between 200 and 300, it should be unsurprising that SRM technology is set to see an increase in adoption.
Supplier relationship management software solutions are used to facilitate and enhance the business relationships between companies and their suppliers. SRM solutions can help organizations to establish strong, mutually beneficial business relationships with suppliers.
We’ve put together a list of some strong options for those interested in implementing a supplier relationship management solution. These solutions provide capabilities that work to unify and streamline the process of examining, evaluating, and making decisions about your suppliers and how you are working together. Read on for our picks for the top supplier relationship management solutions.
What Is Supplier Relationship Management?
Supplier Relationship Management (SRM) refers to the business initiative undertaken by many organizations to foster more stable and mutually beneficial relationships with their suppliers, while also reducing the risks associated with working with outsider organizations. A well thought out SRM program should support increased collaboration and make it easier to identify the right suppliers to partner with. Some benefits of managing suppliers and devoting energy to strengthening your relationships with them include cost optimization, risk mitigations, operations process improvements, and top-line growth stemming from suppliers’ innovation.
What Is Supplier Relationship Management Software?
SRM software provides organizations with a set of tools designed to analyze and manage supplier relationships in a way that is effective and streamlined, from one singular platform. These solutions work to strengthen communication and improve security by controlling interactions, allowing organizations to oversee and evaluate the performance of their suppliers and ensure they are working with the best providers for their needs.
This is a comprehensive approach to resource monitoring and supplier engagements that can have the effect of facilitating and enhancing the business relationship between suppliers and the companies working with them.
What Are The Key Features Of Supplier Relationship Management Software?
SRM software solutions can really benefit your business with a variety of useful supplier management capabilities, such as:
- Providing visibility into supplier data. There is a lot of important information to keep track of for each supplier, such as contact information for both the supplier organizations and the primary contact you communicate with, payment information, purchase history, communications with the supplier regarding all tasks and events, and information on your credit limit or balances due with the supplier. Access to this information in one convenient location streamlines your operations and minimizes the hassle of managing this information for multiple suppliers.
- Make it easier to manage communications and events. Relationships with suppliers cannot thrive without good communication, which can be difficult when dealing with multiple suppliers. SRM software puts all communications in one convenience space for a smoother experience, so no task or relevant communication is missed.
- Help to mitigate supplier risk and ensure compliance. A good SRM solution should allow users to accurately assess supplier risk and make it easy to monitor how well the suppliers you work with are adhering to industry standards to maintain your brand image and ensure compliance.
What Are Some Opportunities And Challenges In The Area Of Supplier Relationship Management?
Some of the main challenges in this area are those created by the globalization of the supply chain which, while it presents significant opportunity for improvements in SRM practices, can also open organizations up to a higher number of potential vulnerabilities. An effective SRM process, aided by a good SRM solution, can go a long way in mitigating risks associated with supplier performance, quality, and compliance. Limited visibility into supplier performance and actions, limited resources and budget, and lack of standardization are some key challenges organizations must consider and are also some of the areas a supplier relationship management solution can help to improve. They do this by improving visibility, trimming the fat in areas that could be more cost effective, and streamlining the process from start to finish.