Supplier relationship management (SRM) is the process of evaluating suppliers and identifying which relationships are essential to effectively and efficiently do business. In many organizations, as their supply chain grows, the relationships with suppliers become more complex. Supplier relationship management helps companies ensure that they invest in the relationships that contribute to and matter most for their success. Below we discuss the importance of supplier relationship management, the kinds of relationships you might have with suppliers, and ways you can work to strengthen your relationship with your current suppliers.
The importance of supplier relationship management
As with any relationship, both parties strive to build value and profitability. The relationship you have with your suppliers can have direct benefits on the efficiency and productivity of your supply chain. After you have begun cultivating a strong supplier relationship, you need to stay on top of managing the relationship to ensure it flourishes.
With a successful supplier relationship management strategy, your organization can see benefits such as:
Types of supplier relationships
As with every relationship, there are a variety of levels or depths of involvement. The extent to which you are involved with suppliers is based on the intended outcome of the relationship.
The three levels of involvement are:
Vendor — These relationships are primarily transactional. In this situation, both parties are represented as a buyer or seller, with little or no collaboration during the process outside of the transaction.
Strategic Alliance — Strategic alliances are more entwined. In this relationship, both organizations collaborate and modify their processes to help achieve their goals. In this scenario, the relationship is more strategic rather than transactional.
Partnership — In partnerships, both parties work closely together to customize their business strategies to produce positive results. These outcomes are generally more successful than anything either part could achieve individually.
Why organizations should be concerned with supplier relationship management
Aside from the benefits we listed earlier, organizations should concern themselves with their supplier relationship management process to ensure they retain the relationships they already have. It is usually more cost-effective to invest in keeping a relationship going than to source and start a relationship from scratch.
How the Tradeshift platform optimizes supplier relationship management
Tradeshift revolutionizes supplier relationship management with Tradeshift Engage. With our digital portal, vendors can see value in their relationships with you from day one. Rather than just push your suppliers through automated portals, Tradeshift Engage allows you and your suppliers access to collaborative tools and analytical capabilities to help you create a highly efficient and strategic supply chain.
Users choose Tradeshift to support their supply chain operations because of our:
Better data Tradeshift Engage’s analytical capabilities gives sellers a quick dashboard view of payments and transactions. When integrated with Tradeshift network’s data, suppliers will enjoy access to all of their data in one place. This organization leads to fewer inquiries and a more efficient process. Our answers to your questions come faster, are more in-depth, and provide more clarity than anywhere else.
Enhanced collaboration Giving your suppliers a personalized experience right from the start, Tradeshift Engage strengthens communication by storing and consolidating conversation history. Users can easily collaborate on tasks, attach necessary documents, and search for old records, all within our digital platform.
Embrace of digitization The Tradeshift network acts as a digital hub to support and assist with your supply chain needs. Suppliers enjoy access to our powerful digital tools, improving their processes and capitalizing on new opportunities. Plus, when suppliers sign up for Tradeshift Engage, they also gain access to our online payments portal, helping you secure payments more quickly.
Start investing more time and effort into cultivating strong supplier relationships. To learn more about how Tradeshift Engage can assist with your supplier relationship management, reach out to one of our experts or sign up for a free demo now.
Tradeshift is a market leader in e-invoicing and accounts payable automation and an innovator in supplier financing and B2B marketplaces. Its cloud-based platform helps buyers and suppliers digitize invoice processing, automate accounts payable workflows and scale without limit. Headquartered in San Francisco, Tradeshift’s vision is to connect every company in the world, creating economic opportunity for all. Today, the Tradeshift platform is home to the world’s fastest-growing network of buyers and sellers operating in more than 190 countries.
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