Supplier Relationship Management: Collaboration for Win-Win Competitive Advantage

APQC - February 2007

Abstract: Best-practice organizations share their secrets for rationalizing their supply bases to include only the strongest, best-performing, and most collaborative upstream partners and leveraging those partnerships to reduce cost, improve quality, and increase customer satisfaction in Supplier Relationship Management: Collaboration for Win-Win Competitive Advantage.

Key Findings

Supplier Relationship Methodology

  • Partnering with suppliers and integrating supplier relationship methodology into strategic sourcing initiatives improves supply chain effectiveness and customer service.
  • Effective SRM aligns with corporate goals through cross-functional strategic initiatives involving cross-functional teams in supplier relationships.
  • A supplier relationship initiative must be recognized and supported by the entire organization.


Collaboration and Synchronization of the Supply Chain
  • Strategic relationships require time, trust, mutual understanding, regular and consistent communications, and mutual commitment to establish a long-term relationship.
  • Building an effective supplier relationship framework involves identifying and categorizing spend characteristics and then implementing initiatives across a rationalized supplier base.
  • Working with suppliers to develop mutual capability and integrated strengths serves to continuously improve supply chain effectiveness and, ultimately, customer service.

Technology and Processes as Enablers
  • Strategic supplier relationship initiatives require standardized processes, an organizational structure that supports the processes, and accountability for key objectives.
  • Joint identification and implementation of tools/technology with supply chain partners lays the foundation for a collaborative environment.

Measurement, Results, and Continuous Improvement
  • Effective metrics are those developed and set in collaboration with suppliers and stakeholders.
  • Enforcing SRM internally through measurement and rewards ensures program success and drives results.
  • Keywords: Supply chain management - Supplier partnerships

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