Supplier Relationship Management: the secret to creating successful relationships with suppliers

what is Supplier Relationship Management

Maintaining relations with suppliers is an increasingly central issue also for small and medium-sized companies. Let’s find out what Supplier Relationship Management is and why it is so important.

What does Supplier Relationship Management mean?

The topic of Supplier Relationship Management is not new: it was brought to the attention of big companies in the 1980s by P. Kraljič of McKinsey.

Supplier Relationship Management or SRM means managing relationships with suppliers with a strategic approach.

A company classifies and evaluates its suppliers, defining which products or services are priorities for its business; based on this analysis, it plans strategies and actions to better manage procurement and relationships with all of its suppliers.

Why is SRM central and strategic?

Supply chain decisions impact many areas in the company: procurement, quality control, logistics but also project management and financial aspects.

So it is clear, that a precise and punctual supplying process is decisive for the success of a company.

The goal of this approach is to improve the relationship with suppliers. Maintaining relationships based only on savings is counterproductive. Instead, taking care of the relationships with your suppliers as real partners, helps to create value for the company and to prevent any risk.

To better manage these processes, the company must be supported by a software capable of processing all data relating to suppliers.

What does a SRM software do?

A SRM software is a tool to centrally manage collaboration with suppliers.
Within it, it is possible to manage both operational and analytical aspects of relations with your suppliers. From sourcing to quotation requests, from orders to transport management. It is possible to monitor suppliers’ performance in real time, including corrective actions, and don’t get caught unprepared.

Small and medium-sized companies that choose to have a supplier management portal offer their partners a forward-looking and professional business card, as well as a competitive advantage for their company.

As said before, the performance of suppliers, especially strategic ones, impacts the performance of your company. Thanks to SRM software it is possible to manage, monitor and analyze supplier performance in real time and prevent unforeseen circumstances.

Two relevant aspects of this strategic approach, supported by SRM software are:

  • timely communication and traceability of the relationship. If you change the purchasing manager or involve new people, all information is available in a single place.
  • real-time monitoring and evaluation of KPIs. Key information can be shared with strategic suppliers: not only forecasts, but also information on performance. This reduces alignment meetings and phone calls.

The results will also be manifest in

  • optimizing warehouse management and delivery times
  • greater efficiency in production planning
  • the measurability of waste/errors.


Are you interested in a SRM software for your company?
We can help you further with our Supplier Relationship Management portal D/srm.


Contact our consultants.