Best practice for supply chain dictates that managers should look to form closer, longer term relationships that deliver long term value to both parties.
Many supply chain experts, when defining SCM, look to emphasis the importance of these relationships with key suppliers in increasing value and reducing total supply chain spend.
Strong relationships help drive collaboration, trust and value throughout your supply chain. Top level organisations recognise the importance of developing and maintaining world class supply chains that give them competitive advantages from others in their market. One such example has been Apple, a world class supply chain has complementing their creative drive to make them the leader in their market.
Transparency and performance have always been important for organisations looking to be market leader. Therefore many of them are starting to recognise the value in SPM for nurturing supplier relationships through a performance culture.
Performance review meetings can become common place for maintaining relationship supported by world class performance analysis.
Using custom built reports and dashboards, supplier relationships can be maintained and nurtured to ensure your supply chain can be world class. Global supply chains are complex, high number of in putters, long distances & language barriers and an SPM system can help manage all of these.
The barriers that traditionally would prevent strong relationships being developed can be overcome through adopting a SPM approach. Reporting and reviewing performance allows for greater contact with suppliers, to address issues and find resolution.
Performance management can play a role in SRM and help reduce bottom line spend and help optimise your supply chain.