SRM lacks definition

1 February 2010

2 February 2010 | Jake Kanter

Supplier relationship management (SRM) is suffering an “identity crisis” as buyers struggle to agree a definition, a study has revealed.

The survey of 300 purchasers by procurement recruitment consultancy Edbury Daley found SRM was a “hugely fragmented and dispersed agenda”, and often lacked the ‘relationship’ element.

The results, released exclusively to SM ahead of general publication, revealed the popular reasons for monitoring supplier relations ranged from traditional contract and cost management, to benefits including cash management and innovation.

“Different businesses have different definitions of what works for them,” said Edbury Daley director Andrew Daley. “It would not be unhealthy to define SRM in one way, but it would be difficult. There should be some consensus on the issue among the profession’s leaders.”

The study also exposed an “ad-hoc” approach to SRM training. A third of the respondents only received guidance on vendor management when it became a requirement of their role, while an equal number of buyers said their SRM skills were self-taught.

The finding was surprising because 90 per cent of purchasers said SRM was part of their regular responsibilities and 54 per cent believed good vendor relations could provide their organisation with a competitive advantage.

David Pomfret, one of the report’s authors said: “SRM is not simply supply management re-badged, it’s an investment in one of your most critical assets. One respondent said ‘it’s not a couple of hours a week bolted on to the day job’. Perhaps SRM is a like driving – lots of people think they are good at it, however few really are.”

See SRM feature here

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