How to get the most from clear and defined oversight of suppliers.Â
By Jennifer Beck
The call to do more with your strategic relationship management program is not new or easy, but the time is now to start executing a well-orchestrated strategy. In other words âtalk is cheap, action speaks.â By managing third-party partnerships in a strategic and organized way, organizations are solidifying the movement future forward in joint growth and value creation.
As a result of further increased outsourcing of non-core competencies, organizations are starting to realize that they have to be more reliant on suppliers in terms of innovation, corporate social responsibility, and ongoing cost savings. Many organizations have trouble developing, implementing, and managing key partnerships. A solid partnership foundation is based on four values:
â¢ Open communication
â¢ A win-win positioning
Remember, not every supplier is qualified as a partner; supplier segmentation is necessary to differentiate supplier strategies. Actually, only a few of your suppliers should qualify as a strategic partner. These are the ones that can create value and growth beyond cost cutting. Non-strategic partnerships are managed by means of other measures such as performance to contract.
A strategic partner should be treated as the expert. With that in mind, a strategic relationship management program should deliver value for the strategic partner otherwise the program will not hit the expected organizational results. Value is defined by the goals and objectives set up front in a joint effort, such as increased market share or competiveness and improved culture. If value is not achieved, this also decreases the programâs both internal and external value.
A successful strategic relationship management program starts with a clear vision and an outline of objectives that must fully contribute to business goals and the overall business strategy. Another critical factor is sponsorship of top executives to ensure the right priorities are set and the appropriate resources are allocated. Finally, designating the appropriate tracking and reporting tools are absolutely non-negotiable.
Innovation is ranked as a top driver for growth. Innovation is not just driven from front-office capabilities, but back-office operational innovation also drives sustainableâand frankly more profit. Supplier relationship management can help drive your company to greater success. Be sure to ask yourself: Is my supplier relationship management program delivering value internally and externally?
Jennifer Beck is the CEO of consulting firm Higher Metrix.