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25 September 2013 | Will Green
Supplier relationship management will be the “next wave of competitive advantage”, according to expert David Atkinson.
But he warned firms “don’t have sufficiently high aspirations for post-contract value from SRM” even though it could create “up to 23 per cent of additional value”.
He defined SRM as the “deliberate pursuit and systematic management of post contract value attainable from an organisation’s supplier relations”.
Atkinson, managing director at Four Pillars management consultancy, told eWorld Purchasing & Supply in London yesterday the challenge was measuring the value of SRM and obtaining agreement on best practice.
“There is no sufficient consensus around processes,” he said.
He described four steps to get value from SRM, and these are stakeholder negotiation, creating a cross-functional SRM team, relationship analysis and forming a relationship strategy.
“It’s the next wave of competitive advantage,” he said.
“Technology has made a significant contribution in the pre-contract phase. However, I think the real prize is if we are able to measure the whole value spectrum.”
Atkinson said research had shown 69.9 per cent of firms' costs were non-labour costs.
“SRM is here to stay. What we have to decide is how good do we need to be at it,” he said. “With 70 per cent of spend in the supply chain it shouldn’t be a choice.”