What is Supplier Management?
At SMaRT, here’s how we define Supplier Management:
“Supplier Management is managing all activities with a supplier following contract signature, with the intention of maximising value and minimising risk”.
Sounds simple! But it’s not simple at all; in fact, it’s rather complex. So, let’s break it down:
At a high level, Supplier Management is about 3 things:
- The “Enablers” of Supplier Management
- The “Components” of Supplier Management
- The “Results/Benefits” of Supplier Management
Enablers:
To be effective in managing suppliers in a consistent and professional way, you’ll need good people, good processes and good IT (which can be simple and inexpensive). Without these you’ll never get Supplier Management off the ground, and it won’t deliver the benefits you want.
Components:
This gets to the heart of what Supplier Management is. We group the activities that constitute Supplier Management into 7 areas:
- Mobilisation of Supplier Management
- Governance and Relationship Management
- Segmentation and Risk Management
- Performance Management
- Contracts Management
- Commercial Management
- De-mobilisation
It’s important to be clear about what Supplier Management is and what the components are, because you can’t deliver the benefits from Supplier Management unless this is clear.
Results/Benefits:
We summarise these as:
Maximising: value for money, innovation, supplier performance, compliance and user experience, whilst:
Minimising risk in the supply chain
Sounds easy stated like that; but of course, it’s not easy – otherwise everyone would be doing it and delivering great results all the time. And we all know that’s not the case.
The image shows how the enablers, components and results of Supplier Management are intrinsically connected. Without the right foundations and the right structure, you’ll never deliver the results you want.
We help organisations get results from Supplier Management. Contact us for more information.
Latest News
Why managing suppliers is so important.
Managing suppliers is about much more than getting what your contract says you should get from your supplier. It's about: Getting great performance from your suppliers Managing risks in your supply chain Ensuring you [...]
How to recognise the best supplier managers
The best Supplier Managers have the following traits: 1. They are empathetic, yet tough 2. They make evidence-based decisions 3. They are great influencers 4. They are great leaders 5. They have a (very) [...]
Supplier management maturity assessment
Want to understand how good/bad/middling your organisation is at Supplier Management? You’ll need to have a Supplier Management Maturity Assessment completed to find that out. Message us if you want us to send you [...]
10 things you should be tracking to see if your supplier relationships are working well
Performance v SLA/KPIs Risks; are you preventing problems? Issues; are you experiencing problems? Customer satisfaction Supplier satisfaction Spend versus contract/budget; are you getting value for money? Performance in projects Innovation Mutual benefits Compliance with [...]
Top 10 reasons to get supplier management right
1. You prevent key risks becoming critical incidents 2. Your suppliers bring you brilliant new ideas 3. You improve the value for money you get 4. Your suppliers perform better 5. Your customers have [...]
Top 5 supplier risks you must manage properly.
1. Protecting confidential data. If you don’t manage this supplier risk then you could find your organisation is fined, sued, or suffers reputational damage in the media. 2. Continuity of supply. If you don’t [...]
