Mid-market companies face a unique set of challenges when it comes to developing a supplier relationship management strategy.
These organizations are typically too large for manual processes to be effective, but lack the financial and personnel resources of larger enterprises. Therefore, they need to use strategies that leverage technology in order to maximize efficiency and achieve cost savings.
Here, we’ll look at some components of an SRM Strategy that mid-market companies can use in order to optimize their operations and remain competitive in the market.
Components of your Supplier Relationship Management Strategy
There are three pillars to a successful Supplier Relationship Management strategy:
- Centralize supplier data
- Expand supplier network
- Invest in automation
Let’s look at these three pillars in more detail.
Centralize Supplier Data
One of the most important steps in any successful supplier relationship management strategy is centralizing supplier data so that all relevant stakeholders within the organization have true supplier visibility. This means bringing together information from various sources such as purchasing records, RFX, contracts, invoices, orders, performance evaluations, etc., into one centralized database or platform where it’s easily searchable and up-to-date.
Having complete oversight over an organization’s vendor data can make it easier for personnel across departments (finance, logistics, procurement etc.) to compare suppliers and assess which provide the best value while also making sure regulations are being followed properly. This makes SRM much easier to manage and maintain.
Expand Supplier Network
Another way mid-market companies can optimize their supplier relationship management strategies is by expanding their supplier networks.
By expanding their vendor pool they can access a greater variety of services and products at better prices due to increased competition between suppliers for their business – essentially creating a buyer’s market rather than relying on single/limited sources or having inefficient negotiation processes with existing partners.
Additionally, increasing the supplier pool can reduce risk as well as help ensure continuity should an issue arise with one partner. Very simply, it’s good to have other options available in case that partner were unavailable or unable to fulfill its obligations.
This is another area where technology helps. The main reason companies reduce the number of suppliers they work with is that larger networks are harder to manage. But software can cut the amount of time it takes to manage supplier information by 75%, which means that software lets you do a lot more with less.
Use Supplier Relationship Management Automation & Analytics Tools
Finally, investing in automation and analytics tools can streamline daily processes related to SRM activities like contract management, performance evaluations, risk assessments and information updates. That frees up resources for higher priority tasks, or allows for a leaner team size.
Additionally these solutions provide insight into performance benchmarks and KPIs so teams can identify opportunities for performance improvements and cost savings more quickly than ever before.
Interested in building out a Supplier Relationship Management strategy but don’t know how to start? Vendorful’s mission is to improve all aspects of your supplier relationships – contact us today to learn how we can help.
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