INTRODUCTION
The business of supplier relationships
SRM is a business - critical issue . Our seven years of research in this
area have demonstrated that companies that get this right generate
higher profits , innovate more effectively and
are better able to manage risk . It is hard to imagine a more
commercially relevant set of issues , all of which we discuss in more
detail later in this report .
All the evidence suggests that the role of suppliers will only become
more important in the future . We can see that the nature of business
is changing , with many companies becoming both flatter and more
reliant on third parties to deliver everything from customer support
through to research and development as well as more traditional
products and services . In other words , businesses are putting more
and more of their brands ’ reputations into the hands of other
companies . In such a scenario , a business can only be as good as its
worst supplier .
This is why business leaders – chief executives , managing directors ,
executive chairmen – need to take notice of SRM . Procurement
functions can and should offer support and advice , but at its heart
SRM is a strategic issue that requires senior strategic leadership .
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