SRM is the 'next wave of competitive advantage'

24 September 2013

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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.”

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