SRM – Supplier Relationship Management
In recent years, the perception emerging among leading market players is that supplier-client relations are not the best. If we think about this for a moment, we can understand that, while the supplier holds the burden of proof as the service provider, the relationship is based on mutual agreements and cooperation. In an optimal relationship, there is a win-win situation. However, we know that the reality is often not that rosy. In many cases, as in any relationship, the supplier-client relationship faces difficulties. When this happens, both sides lose time and money.
Aviv Ashkelon works with companies to develop methods for cultivating effective supplier relationship, focusing first on the touchy points and improving processes in the framework of supplier contracts.
Aviv, which companies today deal with SRM and why?
Naturally, the leading global companies are constantly trying to improve profitability and reduce risk. They’ve wised up and adopted this concept after realizing that suppliers do in fact impact an organization’s profitability. Consequently, they can be better leveraged as business partners to help improve competitiveness.
Where and how do you start with SRM?
According to this concept, we can classify suppliers according to their impact on a company’s profitability and risks created by those suppliers who do not provide what is required. Accordingly, we prepare a work plan in which we analyze the risks, performance, quality, and other relevant issues.
How do the suppliers respond to these processes?
Since the method in Israel is new and innovative, suppliers often react skeptically. On the one hand, the organization is stringently negotiating with them to reduce costs. On the other hand, the organization invests in a program to improve their performance. Suppliers still don’t understand that there is a difference between wanting to reach the best price through negotiation and participation in the program, which will ultimately improve their performance and also impact their profitability. . Important clients have the means and influence to oblige their suppliers to enter into such a program. Since suppliers are obviously interested in continuing the relationship, they are often left with little choice. Nevertheless, as mentioned before, if it’s done right, it’s really a win-win situation for both sides
What kind of support do you give clients who ask for assistance on this issue?
The vast experience that we’ve accumulated helps to better identify the touchy points in the client-supplier relationship. At times, the client doesn’t even know that there is a sore spot until we’ve examined the issue. We teach the organization how to effectively utilize the methodology and classify suppliers, in addition to preparing the company on how to formulate work plans with suppliers.
In conclusion, in your opinion, what are the keys to successful supplier management?
One of the main keys to success is developing an organizational awareness of the issue when dealing with suppliers. It’s important that company conduct is tailored to each specific client according to their nature and importance to the organization. Accordingly, each course of action is different.