Robert A. Rudzki

SRM and Supplier Recognition - I

Suppliers who truly perform well deserve to be rewarded and publicly recognized. Shocked? You shouldn’t be.

How you involve your suppliers in achieving your corporate objectives is a critical philosophical – and practical – choice. “Beating up suppliers” is a short-term tactic, with long-term consequences. You don’t have to go very far to identify entire industries that have attempted to fix their own problems by beating up their suppliers. It has proven to be a short-sighted approach.

If you have adopted the type of strategic role that this column advocates – one in which you seek to optimize revenue opportunities, cost reduction opportunities, and capital intensity – that requires the active involvement and willing participation of your suppliers. And identifying the right relationship with each supplier is critical for success of both parties.

In this particular posting I won’t delve into the “Supplier Relationship Management” debate, other than to say that I’m dismayed that some consulting firms have created a new product around the acronym SRM, when all you really need is a robust strategic sourcing process plus a good helping of common sense and follow-through. The best strategic sourcing processes that I’ve encountered embed the essentials of what is now being referred to as “SRM” – and do so as part of an integrated and strategic business process, not a standalone SRM project.

To portray SRM as some sort of distinct, separate process adds unnecessary complexity in a world where simplicity pays big dividends. If you feel tempted by the SRM sales pitch, first audit your core supply management and sourcing processes.

For a good read on SRM, see chapter 6 of “On-Demand Supply Management” (Smock, Rudzki, Rogers).

More in my next posting.

Posted by Robert A. Rudzki on April 7, 2008 | Comments (0)