Relationship Between Business Enterprises and Supply Chain

Business enterprises spend significant resources on Customer Relationship Management. However, with all the unabated focus on the customers and revenue generations, supplier relationship tends to take the back seat. The seamless procurement and delivery of goods are what separates a high-performing enterprise from that to a comparatively struggling one. The importance of Supplier relationship management is a tangential aspect of Supply Chain Risk.

As we tread into an ever-growing and highly competitive online sphere, a business enterprise cannot be expected to be left wanting. This is where Supplier Relationship Management proves its credence.

What is Supplier Relationship Management?

According to the CIO Leadership interviews carried out in 2010, “SRM is the systematic, enterprise-wide assessment of suppliers’ assets and capabilities with respect to overall business strategy, determination of what activities to engage in with different suppliers, and planning and execution of all interactions with suppliers, in a coordinated fashion across the relationship life cycle, in order to maximize the value realized through those interactions.”

Consider a scenario wherein you are confident of the inventory and capabilities of your supplier. From a seamless procurement process to timely assistance to provide most sought after goods to your respective customers, a reliable supplier on board aids in the profitable relationship with the targeted customers. All these interactions with the supplier which include assessment, strategy formulation, and procurement through a single channel be referred as Supplier Relationship Management program.

Today, more and more businesses are already yielding fruitful results with a concrete Supplier Relationship Management Program in place. Hence, the importance and effectiveness of Supplier Relationship Management can’t be neglected.

Importance of Supplier Relationship Management in achieving business profitability:

1. Seamless procurement of reliable materials

For any business enterprise, the time spent over to procure goods and provide it to the customers can be a tedious process. From competitive price quotations to timely delivery, in the absence of a Supplier Relationship Management program, even a minor hassle can lead to wastage of time and resources.

An effective Supplier Relationship Management program aids in timely procurement and production of orders to the respective customers which guarantee effective resource management and smooth customer experience.

2. Uninterrupted production

An uninterrupted production phase is a vital facet of how customers review the services of a business organization. Now, when you are able to procure quality material and on time, the production phase becomes productive with higher levels of customer satisfaction.

3. Happy customer leads to more business

The reliability of any business enterprise is built on customer satisfaction. Timely distribution of orders to the customers with no redressal issues adds up to customer satisfaction which only gets more business for your enterprise.

4. Exciting deals to cut down on spending

The fierce competition does not leave any scope for the business enterprise to compromise with the quality of the goods procured. Many times the financial constraints limit the spending and business lookout for cheaper alternatives. This is where the Supplier Relation Management helps an enterprise to have the best rates without compromising on the quality and quantity front.

Final Words

The reliability and productivity of any business enterprise is a cumulative result of the relations it establishes with the suppliers and the customers. Hence, establishing an effective and efficient Supplier Relationship Management will take care of all procurement worries subsequently adding fuel to business profitability while you go on to establish trust and branding of the business enterprise in the market.

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