What is the importance of supplier relationship management SRM in a b2b business?
If you’ve spent time running an eCommerce business of any kind, you know how important suppliers are. They are foundational to your business’s profitability, customer satisfaction, and efficient warehousing--just to name a few. They're helpful to know when you're learning how to ship wine. Show
Selling wholesale, selling high demand products, and private label dropshipping all depend on consistent manufacturing and supply. If your supplier isn’t reliable with communication and delivery, your
pipeline inventory will dry up, your fill rate will drop, and demand planning will grow much more difficult. So, what is the nitty-gritty of supplier relationship management, and how can you leverage it for success? Let’s look at the key characteristics of this eCommerce necessity. SRM: Supplier Relationship ManagementSupplier relationship management, or SRM, is the process of strategically managing
supply categories for maximum profitability and success. It includes developing mutually beneficial relationships with suppliers, planning business needs efficiently, and making difficult decisions when necessary. It's also an integral part of what is wholesale and learning how to get a wholesale license. SRM is
important because it directly influences the core aspects of your business. First, suppliers are responsible for supplying everything from raw materials inventory to finished goods inventory, depending on what you sell. If you aren’t receiving the quality or quantity of materials needed, contact your supplier to get things
straightened out. Second, supplier activity is closely tied to crucial business outcomes. If your supplier is experiencing material shortages, this is passed along to you, their buyer. This creates shortages at the wholesale directory or retail level, which may produce the bullwhip effect later on. Importance of Managing Relationship With SupplierAt first glance, supplier relationship management may sound needlessly complex. After all, don’t you just need a supplier or two that delivers products on time? There are several reasons managing relationships with your suppliers helps your business thrive. The more in tune you are with your key operational partners, the more value you can bring to your customers. More value equals greater profits, which allows your business to continue reaching customers in new ways. Objectives of Supplier Relationship ManagementGetting your incoming shipments down to an exact science with your supplier is something to be proud of. This alone requires precise coordination of information and fast thinking when obstacles crop up. As you grow comfortable with the occasional fluctuations of supplier relationships, you’ll notice ways to grow your business beyond daily operational success. It’s wise to
build reciprocity with companies that you may be working with for decades to come. Here are some sample objectives of supplier relationship management for your own business:
Supplier Relationship Management ActivitiesSince there are so many different types of eCommerce businesses, the SRM activities you carry out will differ from other businesses. The degree of variance depends on the type of products sold, supplying companies, business size, software used, and other factors. Despite such variability, there are common supplier relationship management activities you can utilize. Here are
four of them:
Supplier Relationship Management Process FlowA
supplier relationship management process flow is a chart mapping the steps raw goods go through, from your supplier through the final stage of production. It includes raw material procurement, supplier processes, order management and order fulfillment, customer service, and the
RMA process. A process flow can be created as a reference tool or to train new employees. However, it’s most often used to spot what needs fixing or improvement. The size of your SRM process flow expands the more steps you add to it. Depending on the purpose of your SRM process flow, it may include a warehouse management process flow. This is the visual flowchart for your own warehouse to ensure that work in process inventory and merchandise inventory go where they need to. Supplier Relationship Management StepsAfter you’ve categorized your suppliers and narrowed in on the most valuable ones, it’s time to engage your SRM plan. Having a supplier that sells quality, affordable products is a great start, but
this alone won’t offer the competitive edge you’re looking for. There are smaller factors in SRM that contribute to--or detract from--long-term business success. A successful SRM strategy includes understanding what makes an excellent supplier and knowing how to mutually leverage that relationship. Here are the core supplier relationship management steps to be aware of:
Supplier Relationship Management StrategiesEveryone wants their business to become more profitable, but few people want to put in the work for it. To increase eCommerce sales, it’s important to look in areas that you’d otherwise ignore, like your supplier relationships. There are several supplier relationship management strategies your business can succeed with. Let’s look at some of
the top ones:
Supplier Relationship Management TemplatesIf SRM still feels complex or intimidating, there are various supplier relationship management templates to leverage. This allows you to focus on your answers so you don’t need to reinvent the wheel or wonder if you’re leaving anything out. SRM documents can be extensive for large companies and enterprise-level operations. Your document can be
customized for your needs. A good SRM template includes the following sections at a minimum:
Top Supplier Relationship Management SoftwareWhen learning about SRM for the
first time, it’s good to have your first draft written on paper. This gives you the freedom to consider as many ideas as you want without the risk of repercussion. Once you have the hang of things and want to automate more of your work, you should consider supplier relationship management software. These tools track data like invoicing issuing time, invoice accuracy, average order quantity (AOQ), and applicable discounts. All of it is done automatically so you can review information
periodically and make decisions faster. Here are some of the top supplier relationship management software providers:
Frequently Asked Questions About Supplier Relationship ManagementWhat Is the Top Supplier Relationship Management Software?The top supplier relationship management software is:
What Is Salesforce SRM?Salesforce SRM stands for Supplier Relationship Management and it provides end-to-end relationship management to businesses so that they can have control over their supply chain. What are SRM Products?SRM products or Supplier Relationship Management products evaluate vendors that supply services, goods, and materials to an organization. They determine the supplier's success contribution and also develop strategies for suppliers to improve their performance. Taking Positive Relationships to the MaxIt can take days or weeks to create a supplier relationship management plan, depending on the size of your business. Once it’s done, you’ll have clear methods on how to remain profitable, efficient, and innovative well into the future, even if you're
still learning how to find vendors. Creating an SRM strategy puts you among the most well-organized businesses. Continue investing your energy into the relationships generating ROI and you’ll be unstoppable. Learn more about how BlueCart can take your supplier relationships to the next level by requesting a demo now. Streamline order management, grow your bottom line, and get back hours of your time with BlueCart. Schedule a demo now: What is the importance of supplier relationship management in b2b business?Supplier relationship management is important because, over time, a long-term relationship between your company and its suppliers allows for the free-flow of feedback and ideas. Over time, this will create a more streamlined, effective supply chain that will have a positive impact on costs and customer service.
What is the importance of SRM?Strategic Human Resource Management is essential for retaining the best talent and developing human resources. It focuses on making employees feel valued and engaged so that they are motivated to stay with the company.
WHAT IS supplier relationship management and why is it important?Supplier Relationship Management is about helping to create positive buyer-supplier relationships and determines which activities to engage in with each supplier. The goal of SRM is to streamline and improve processes between a buyer and its suppliers.
What are the advantages of using SRM Solutions to manage suppliers?SRM Platforms offer a better means for communication, collaboration and sharing information, which can enhance buyer-supplier transparency and ensure a more open, trust-filled and honest business relationship. Visibility is necessary to gain control over supplier risk, compliance, performance, contracts and spend.
|