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Implementing Supplier Relationship Management

May 30, 2013

Everyone agrees on the importance of Supplier Relationship Management (SRM) as a procurement best practice. It is recognized to be effective in building mutually beneficial, long term relationships between supplier and client. I recently interviewed a procurement executive on how to streamline SRM processes, forming an effective foundation for on-going and continuous improvement. What impressed me most was that the old processes set by her more than a decade ago are still delivering powerful results!

The Goal:

Naturally, I was very keen to know the details of how this long-term achievement was made possible. For those of you who may be contemplating similar moves and looking for the right inspiration, here are some of those details. The program had the following end goals in sight when they implemented it:

  • Focus on key performance areas
  • Lean operations
  • Longer contracts
  • Supply base rationalization – fewer suppliers
  • Continuous improvement within the programs and processes for client and supplier
  • Increased use of small, diverse suppliers with the ability to deliver
  • Deployment of a best-in-class VMS program to support and meet program goals

Understanding the program’s goals and priorities is only the first step.  Results are generated by understanding and acting on the practical aspects of the program.

  • Her organization demanded very quick turn-around times from suppliers, and expected the suppliers to maintain on-site and near site customer service centers. She reduced the number of suppliers, with each supplier placing a customer service representative at the client premises to provide the required levels of service delivery, while helping to reduce the suppliers’ operating costs.
  • The company monitored industry best practices for regulatory compliance and market-driven pay-rates,  eliminating deviations by helping the suppliers to deliver to requirements while meeting quality expectations and regulatory requirements.
  • To avoid co-employment risks, responsibility for conducting interviews shifted to the suppliers.   For this to be successful, the company improved the quality of their job descriptions and also worked with suppliers to set expectations of required worker quality and standards.
  • The company reviewed performance every quarter, highlighting issues and finding solutions and fixes as required.
  • The company had a 2 year tenure limit requiring a 6 month break between assignments.  To ensure continuity of work and reduce the number of requests for exceptions, they built a bench of pre-screened former contingent workers who could be quickly brought on board a second time..
  • All worker data was managed within a VMS.  The tool enables them to monitor worker and supplier capabilities and performance – and maintain compliance with regulations.
  • Workers were on-boarded using automated processes where possible. This ensured that the temporary workers completed all needed paperwork, were provided the required training, issued a badge on Day 1 and provided with facilities at the workplace.

After listening to all this, I could only think – no wonder the system is still going strong! As a procurement manager in the thick of such operational programs and decisions, please share some initiatives which were undertaken by you with similar success.


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.

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