Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Managing Supplier Performance – Key to Supplier Relationship Management

By Rahul Awtaney Subscribe to RSS | November 25th 2011 | Views:
loading
 
  



Today competition is not just based on the assets that one control but on the basis of Intellectual Property and the relationship that organizations build with their customers and not to forget the suppliers. Apple and Wal-Mart can be good examples of the latter case.

In order to increase the competency and add new competitive advantages, organizations today are relying on collaborative relationships. Having a healthy relationship with the suppliers, helps organization in receiving better service, procure efficiently and maintain a sustainable relationship over the long run.

Supplier Relationship management involves working closely with suppliers in order to achieve competitive advantage for long term sustainability. As companies move toward a strategic based view of implementing supplier collaboration, having a set process can ensure success.

The process must be flexible considering the dynamic nature of the situation; however it is important to follow the outline in order to measure success of the implementation strategy. This is where Supplier Performance Management

(SPM) helps in providing the backbone to the alignment process.

SPM is an extension of supplier assessment. Today SPM is a business practice used to measure, analyze, and manage the performance of a supplier's performance in an effort to cut costs, alleviate risks, and drive continuous improvement, thereby ensuring a sustainable supply chain. Good supplier performance enables organizations to achieve business performance excellence. Some of the reasons for the increased spotlight on SPM are:

• Increased Outsourcing

• Globalization of business & supply chain

• Increasing supply risk & complexity of managing suppliers

• Changing view of suppliers as strategic drivers to increasing the bottom line

An on-going supplier performance monitoring and measurement, can realize some benefits for the organization. Consider an organization that faces 80-100 supply disruptions per year, with average cost of disruption per year being $50,000, then potential monetary benefit of preventing even 50% of the above disruption will work out to $2.25 million in savings.

An effective supplier performance management program not only encompasses risk mitigation but also helps in prevention of problems. Some of the positive benefits of SPM are:

• Improved collaboration between suppliers and the organization leading to better coordination

• Increased efficiency and productivity for the organization by saving valuable time and money.

o Enabling decision making based on quantitative data which in turn ensures quick and rational decision making.

• A good SPM system allows the suppliers to take initiative in performing tasks like:

o Updating their information to ensure that everything is current

o Improves invoice accuracy and reduces expenses

Thus it can be seen that managing supplier performance regularly can offer benefits in terms of improving supplier relationship which in turn can be a competitive advantage to organizations.

Rahul Awtaney - About Author:
At Zycus we are 100% dedicated to positioning procurement at the heart of business performance. For more than a decade we have been the world's most trusted leader in Spend Analysis. With our spirit of innovation and a passion to help procurement create even greater business advantages, we have evolved our portfolio to a full suite of Procurement Performance Solutions - Spend Analysis, eSourcing, Contract Management, Supplier Management, and Financial Savings Management

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/business-articles/managing-supplier-performance-key-to-supplier-relationship-management.htm

Related Business Articles Subscribe to RSS

Mistakes to avoid while choosing property management North Shore companies
Published by Jack on August 15th 2012 | Business
Choosing the best property management North Shore company is not an easy task. Learning more about t...
 
Zodiac Solutions Inc- Making effective management your criteria for growth
Published by Rahul on July 24th 2012 | Business
To help your organization’s success stay constant even in the times of economic slowdown, there ar...
 
Off-site records management is always a more secure option
Published by Nancy Deholla on January 13th 2012 | Business
Document and records management provided by an external source is the most secure option for busines...
 
Why is management training so important
Published by Julia Roger on March 22nd 2012 | Business
Dancing Lion are leading providers of Management Training, Call and Contact Centre Training and Cust...
 
Building management services- Setting up new relations
Published by Julia Roger on May 9th 2012 | Business
The owners corporation management services are taxed on profits and are permitted deductions for sal...
 
Electronic parts supplier for Industrial Purposes
Published by Albert John on February 27th 2012 | Business
Electronic parts supplier can be selected when you need high end parts. There are various sources av...
 
Outsourcing Payroll management services for small business in Delhi NCR
Published by Webin Lee on March 6th 2012 | Business
It is cheap to outsource the Accounting and Payroll services from the payroll management company rat...
 
Financial management of a festival production
Published by Adam Walker on April 11th 2012 | Business
Summer is coming up in Europe and the festival season is opening. This summer hundred thousands of p...
 
Contractor Expenses – effective cost management
Published by Crowin Smith on April 3rd 2012 | Business
Managing a business is a hard task when the world economy is not creating the right condition that f...
 
Strategic management of physicians’ day-to-day operational issues
Published by Jacob Thomas on November 29th 2011 | Business
Unlike physician practices of yesteryears, physician practices today have found themselves surrounde...
 
Mechanical seal supplier and exporter India !
Published by Nisha Ray on March 23rd 2012 | Business
A mechanical seal is a device which helps join systems or mechanisms together by preventing leakage....
 
Steel Beams- Choosing a reliable supplier
Published by SteelBeams on August 8th 2012 | Business
Looking forward to construct a building? Well, steel beams are one the most important thing that you...
 
Financial management of a small business
Published by Adam Walker on April 11th 2012 | Business
Small business owners tend to many times think that it is best to do all the work by themselves. Tha...
 
Strata management solution and benefits
Published by Chris Whelan on February 29th 2012 | Business
Previously people didn’t face such difficulties during dividing their property or acquiring their ...
 
POS management system – helping businesses as well as its customers
Published by Diego Hall on December 2nd 2011 | Business
POS management system is a technology that helps not only businesses but its clients or customers as...
 
Supply chain management is incomplete without pick and pack services
Published by Diego Hall on December 15th 2011 | Business
Pick and pack services are integral parts of a business. These services are so crucial that they can...
 
Advantage of Joomla for a content management system
Published by Roney on February 7th 2012 | Business
Joomla hosting allows users to keep track of each part of the website content users are more or less...
 
Services Offered by Property management Sioux Falls Companies
Published by Julia Roger on May 25th 2012 | Business
The Property management Sioux Falls companies are the most famous names in business. They have earne...
 
Make waste management easy with skip bins
Published by Matthew Arthur on August 6th 2012 | Business
Waste, trash or garbage is needed to be disposed in a proper way. There are many reputed companies w...
 
Handle all aspects of property with Dallas property management companies
Published by James Blee on June 9th 2012 | Business
Dallas property management companies are one of the reputed names in handling all aspects of propert...