Transform SRM into Strategic Relationship Management

chess board BW_Toby Fruge'In SupplyChainBrain’s 2015 Resource Guide, one of my articles notes that the movement to implement real and lasting collaboration is alive and well in supplier relationship management (SRM).

The key point is, how can SRM be truly effective without collaboration that includes processes for transparency and continuous communication, and where suppliers are full partners in managing the relationship?

One of the key lessons I teach about Vested’s Rule 5 (governance with insight rather than oversight) in the University of Tennessee’s Executive Education course is that companies should not install mechanisms to manage the supplier—rather they should think in terms of putting in a system that manages the business with the supplier.

This is because the best supplier relationships have adopted the Vested “what’s-in-it-for-we” (WIIFWe) mindset. In other words, get away from managing your supplier—work together in an environment grounded in trust, transparency, flexibility and guiding principles that are mutually defined by both parties.

I truly believe an era of increasingly collaborative, value-based buyer/supplier relationships is at hand. We are closer than you might think to a world where truly collaborative strategic relationships are the norm. That’s why there might soon come a day when SRM is commonly known as Strategic Relationship Management.

Image: Chess Board by Toby Fruge’ via Flickr CC

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