Supplier Relationship Management

How to build a positive and sustainable SRM model

The Client’s procurement team was focussed on sourcing activity rather than the full procurement lifecycle as there was limited Supplier Relationship Management capability in place. Without a formal approach, they faced commercial exposure and third party risk.

Client

Utilities service company

Service

Performance & maturity

Sector

Utilities

Problem

With only one supplier relationship manager in place, who was focused on their single largest vendor, the client were significantly under-resourced and lacking in capability. There was no evidence of any formal or consistent framework in place meaning the majority of their strategic suppliers (those that represent high spend, risk or dependency) did not have the necessary oversight and management approach in place to ensure the contract value was being delivered.

Solution

We designed and implemented an SRM model to ensure all supplier engagement (via a meeting framework) maximised the benefit from the relationship, improved governance & decision-making and reduced exposure & risk. The solution was based on a value and risk assessment to segment their suppliers and drive the most appropriate management approach. A database was also established that provided a single source of truth for reporting purposes and freed up resource time for value-added management activity.

Results

The Procurement and SRM teams are refocussed, they understand their roles and can prioritise strategic, core relationships that will provide the most value to the business. A fully aligned SRM approach is operational, providing consistency, accurate business reporting and a significant reduction in commercial risk. With visibility of their key suppliers and their performance, the team is now able to successfully drive value across the full procurement and SRM lifecycle.

20 Top 20 strategic suppliers under management SRM framework in place
I had the pleasure of working alongside Sarah from Aster, who provided an invaluable service in aiding myself in maturing the team’s approach to procurement and vendor management. Sarah has a wealth of experience in procurement, contracts, SRM, vendor management and negotiation in both technical and non-technical contexts.”

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