Supplier Relationship Management Framework

Supplier Relationship Management Framework
Supplier Relationship Management Framework

Implementing a Supplier Relationship Management Framework requires performance data visibility to ensure that both parties perform according to the ‘performance frameworks’ that form part of a mutually binding contractual agreement.

Key data elements are necessary to manage quality, timing, delivery, and end-customer satisfaction. When these key data elements have been agreed upon and enabled via an enabling technology, it provides internal stakeholders a visual performance dashboard on the 360 degree performance of a particular contractual agreement. This is achieved via the development of “Functional Requirements” documentation that act as founding members of a buyer / supplier relationship performance management.

The purpose of the Functional Requirements document is to define the functions that the system must track and report on regularly.

Once the Functional Requirements have been agreed, the next steps are to develop Functional Specifications that need to be enabled by a technology – or a combination of technologies.

Once in place, this approach allows an ongoing and proactive management of a buyer / supplier commercial relationship.

  • Proactive management reduces the needs of a cumbersome, time consuming year-end acquittal process that may result in P/L imbalances;
  • Support contractual obligations;
  • Ensure delivery against contractual and performance obligations;
  • Allow ongoing performance improvement;
  • Identify cost saving opportunities for buyer and seller alike;
  • Enable proactive budget forecast management.

Developing and implementing successful Supplier Relationship Management Frameworks across your suppliers base must first recognise that not all suppliers are the same, and therefore the relationship must be individually tailored, rather than dealt through a single strategy.

Feel free to contact us for further information on implementing a Supplier Relationship Management Framework for your existing or upcoming contracts, and increase the performance of your supplier base.

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