Operational Excellence

Vendor Sourcing & Management

Supplier Management

As companies continue to rely heavily on suppliers to drive or own key functions, realizing the expected value from the contracts is an ongoing challenge. In today’s economic environment, most companies face cost pressures and are trying to increase free cash flow to innovate to stay competitive in their respective markets. With the many reasons companies have to outsource to third parties – reducing costs, improving focus, or accessing world-class capabilities – enhancing corporate Supplier Relationship Management is a key function to drive maximum value from suppliers while mitigating risks.

Supplier Relationship Management (SRM) has long served as catch phrase in the procurement world. As the low-hanging fruit to improve operational performance and relieve cost pressure becomes increasingly more difficult to find, SRM continues to gain focus from corporate executives. To this point, very few companies have achieved mature SRM capabilities, and more and more companies are beginning to put resources towards improved SRM performance. As companies do so, they need to ensure they have a solid foundation in place with the appropriate functions included in SRM, including:

  • Supplier Performance Tracking & Reporting
  • Managing Supplier Relationship Strategies
  • Enabling Supplier Collaboration

A common problem that our clients encounter is these three functions are broad and difficult to take from an SRM strategy to an established and sustainable process. Jabian recommends building your SRM strategy first by identifying opportunities and goals that will generate benefits across the enterprise. Common goals which hold different prioritized weight depending upon the organization include:

  • Improving and realizing delivered value
  • Improving cost efficiency and cashflow management
  • Mitigating risk
  • Ensuring appropriate supplier diversity
  • Innovating to achieve best practices

As with the majority of problems Jabian tackles, we recommend organizing your people and defining your processes to align with corporate strategies prior to choosing a tool to support your push to mature SRM capabilities.