TECHNOLOGYFEATURE
What elements of SRM can be automated? SRM is about relationships. Much of it will remain person-to-person: face-to- face or on the phone. But cloud-based software tools are making it easier to automate the repetitive, time-consuming tasks, making meetings more productive and data driven. ARTICLE 03/04
SUPPLIER RELATIONSHIPMANAGEMENT In the same way sales can specify an account manager to deal with a certain number of customers, so SRM can create relationship managers to deal with suppliers. The purpose is to ensure the supplier is viewed and treated in the same way across the business and that the management approach and communication is consistent with the supplier segmentation. SUPPLIER PERFORMANCE METRICS Tools can be configured so that suppliers are obliged to enter metrics in a certain way, at a certain time. Reminders can be automated, eliminating awkward phone calls to chase up data froma supplier. Once the system has the data, account managers and other business users can access and examine it to look at a specific suppliers performance across the business, specific categories, or business units, making measurement and, hence, treatment of suppliers more consistent and effective across the business.
CONTRACT MANAGEMENT Typically, contracts are signed and sit in a draw. Even if they are stored in a computer filing system, it is rare the data they contain is accessible to the wider business. But by extracting data from contracts and exporting it to an SRM system, supplier relationship managers can share contract data and make sure KPIs are aligned with contracts. Procurement managers can also make sure they are aware of contract end-dates, to ensure the maximum leverage with the supply market when it comes to tendering or renewing. Meanwhile, legal teams can see whether contracts comply with regulations and codes of conduct. ON-BOARDING, GOVERNANCE AND RISK MANAGEMENT An enterprise-wide SRM system can enforce consistent and complete supplier on-boarding by ensuring suppliers complete a structured questionnaire. This keeps due diligence up to scratch on every supplier. It will also help with governance of supplier management. Procurement and stakeholders can create a regular ‘drum beat’ of supplier meetings, each of which can draw from data, consistent and accessible to both suppliers, procurement and business stakeholders.
CORPORATE SOCIAL RESPONSIBILITY SRM systems can act as a central repository for CSR data. Not only can they require suppliers to input their data in a consistent way, they can also integrate data from third party CSR specialists such as EcoVadis. This way businesses can create supplier score cards for responsible sourcing, including criteria addressing environmental concerns and working practices. Leading businesses know that suppliers are a great source of innovation, introducing new ways of working, new technologies and products to the purchasing business. SRM systems can also capture supplier innovation, as the next piece shows.
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