Relationships need nurturing

25 May 2010
"It's imperative companies start focusing on supplier relationship management and more are doing so." So said one supply chain expert at an SM roundtable debate 18 months ago discussing whether SRM would fall victim to the recession. There weren't any automotive manufacturers in the room, but it seems US manufacturers at least have finally reached the same conclusion. The results of the latest annual study of supplier relations at Japanese and US carmakers this year marked a noticeable shift. While Toyota and Honda were still the car firms most respected by suppliers, they were losing ground to Ford, which had overtaken Nissan to gain third place. It appears the US firms changed their attitude to vendors after many suppliers and even some manufacturers went bust or came close to bankruptcy, in turn threatening the very survival of the auto businesses. It is thought falling scores for Toyota and Honda may be the result of the firms seeking aggressive price reductions from suppliers to compensate for falling sales, but it could be a risky strategy. With fewer vendors now in the market, good SRM could mean competitive advantage. We're often told that for purchasing to get noticed, buyers need to speak and act in line with the overall objectives of their organisations. They must understand how what they do fits in with the big picture and behave accordingly. In the case of procurement professionals at British Airways it's quite clear they get it: their business flies people places and that's tough to do if industrial relations means you're short on cabin crew. No matter, a number of them have trained to get their wings, and as SM went to press the next stage of strikes looked set to go ahead, so some BA purchasers could soon be showing you the nearest exit.
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