4 Mistakes – How Not To Manage Supplier Relationships

It’s no secret that supplier relationship management (SRM) initiatives can be a massive boon to procurement teams and businesses as a whole. When done correctly, these programs can help reduce costs, improve supplier performance, and build better relationships with key suppliers. However, many SRM initiatives fail to meet expectations due to faulty strategy and weak execution.

So, what steps must procurement teams avoid to ensure they get the most out of their SRM initiatives?

One of the most common mistakes businesses make is failing to measure SRM initiatives’ benefits objectively. Without measurable goals, it’s difficult to determine whether or not an SRM program is providing value.

The second most crucial mistake is, that businesses place too much emphasis on supplier cost reduction, which can ultimately damage supplier relationships. It’s important to remember that supplier cost reduction should only be part of the overall SRM strategy.

Another common mistake is neglecting supplier communication and collaboration. To build strong supplier relationships, it’s essential to keep lines of communication open and encourage cooperation between supplier and buyer.

Read more : Supplier Performance Management Based on Accurate Data.

Finally, businesses need to ensure they have the right supplier performance metrics. Without supplier performance measurement, it’s impossible to assess supplier performance and identify areas for improvement accurately.

By avoiding these common mistakes, businesses can set themselves up for SRM success. Companies can reap the benefits mentioned earlier by developing a well-rounded SRM strategy and implementing it effectively.

“Remember supplier relationship management can be a powerful tool, but only when used correctly.”

Or, if you’re looking for reliable service with your SRM program, and want to implement the sustainable benefits of supplier relationship management strategically, contact us today!

We’ll be happy to chat with you about your specific SRM needs.

We are InHouse, one of the leading strategic sourcing service providers. We have a proven track record in supplier relationship management and can help you get the most out of your SRM initiatives!

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