In more and more markets, it is no longer individual organizations that succeed but the supply chains in which they operate. Businesses and increasing public sector and not-for-profit organizations can’t survive in isolation. Organizations need to form strong alliances with partners up and down the supply chain and together find innovative ways to serve their end customers by being better, faster and cheaper. This is the reason and basis for Redeure’s extensive focus on constantly and improving it’s vendor development & SRM programs
SRM is a way of working with your critical and strategic suppliers to systematically identify opportunities to reduce cost, improve service and quality and innovate. These opportunities are then run as projects with team members from both sides. It eliminates waste and barriers to effective service contract set out what has been agreed between the buyer and seller in terms of what will be delivered and for what price.
In practice, waste can be created due to inefficiencies in how the processes, systems and ways of working of the two sides come together. An SRM program can identify these sources of waste and eliminate them- creating lower cost and improved service. It also builds mutual dependency. If both sides value the benefits they get from the relationship created by your SRM program then they acquire an expectation that the relationship will be long-lasting. This means that in times of scarcity your organization is unlikely to be affected by any need for the supplier to ration their output
It also encourages investment. If critical and strategic suppliers in your SRM program see that it creates value for them, and that the business relationship is likely to be a long one, then they are more likely to make your investments that increase their capacity and capability to live for what you need. It also motivates suppliers to go the extra mile.
Adversarial supply relationships in which every problem seems to belong to the supplier create dissolution, disillusionment and disinterest for them and result in a lack of motivation. Our SRM programs try to create shared responsibility and this further translates into motivated suppliers who go out of their way to help you.