What is Supplier Relationship Management?

Till now we have learned about a lot of things related to inventory management and the eCommerce industry. So, this time we will learn an important aspect from the industry which is supplier relationship.

Supplier relationship management is similar to customer relationship management which is a common methodology used in any business.

Like the companies interact with their customers frequently for various purposes, similarly, the seamless interaction with the suppliers for purchase, logistics, delivery and collaboration on various aspects, is called supplier relationship management. 

Let us understand in deep about what is supplier relationship management in the further section of this article.

Supplier Relationship Management 

supplier relationship management
Supply chain system

Supplier Relationship Management is a process of accessing and evaluating the supplier’s strengths and capabilities of supplying goods, materials and providing services to a company in order to improve the performance of the overall supply chain system.

It is basically a systematic approach to evaluate the suppliers and distributors regarding their services based on their contribution to overall success and strategies incorporated for the efficient performance of the entire supply chain module.

This is not just a management process but it is a discipline that is followed strictly by every business person and the managers who are managing the entire supply chain process.

Often managers find this strategy helpful to build a better relationship with the suppliers based on their performance and agility in order to have healthy business collaboration with them.

Components of Supplier Relationship Management

Let us now understand some important aspects of what is supplier relationship management that plays an important role in the overall efficiency of the process.

Organizational Structure – 

While there is no published model or a strategy for implementing SRM at the organizational level, the following three steps can be said as the organizational structure for implementing the SRM.

SRM Team –

Having a dedicated SRM team can be very helpful in order to facilitate and coordinate all the requisite functions for an efficient SRM process.

As the SRM process is cross-functional it requires a good command of commercial, technical and interpersonal skills which are of utmost importance in developing a strong and trustworthy business relationship.

Relationship Manager – 

relationship manager
Relationship Manager

Employment of a formal relationship manager or a supplier account manager will be a great step for an organization, as the said manager can interact directly with the suppliers and can manage the supply chain process including procurement.

Executive Sponsor – 

After forming a dedicated team to manage the supply chain process, it is mandatory to appoint an executive sponsor who will handle all the complex strategic relationships with the suppliers. These sponsors would work as a dispute resolution body as well as prioritization of the supply chain module.


The supply chain functions need to be keenly monitored and governed in order to have an efficient system that includes a clear and jointly formed framework for the top-tiered strategic suppliers.

Joint Activities 

Joint Activities with suppliers include – supplier summits, executive meetings, business planning meets, operational reviews, etc.

With such activities, you can interact and build a healthy business relationship with all the suppliers you work with along with those with whom you will be working in future.

The supplier summits bring together all the suppliers where you can share the company’s strategy and provide feedback on the supplier relationship management. Also, such events can be a good networking opportunity for everyone.

Systematic Collaboration

Collaboration is of utmost importance in any business and when it comes to supplier relationship management a smooth collaboration with all the strategic suppliers and distributors can play a vital role in developing an efficient supply chain model.

Technology and System 

technology and system
Technological system

Technology has its own advantages when it comes to managing a whole operational system. You can use technology in various models of supply chain systems and when you are in supplier relationship management, then also you must be equipped with proper technological devices and systems that can help you build and maintain a strong supplier relationship.

There are various tools, apps, and software’s available in the market that works efficiently in the said domain and can be useful in the respective supplier relationship management.

These are some of the important components of Supplier Relationship Management that must be given priority in order to have an efficient supply chain system and good supplier relationship management.

To know more about the supply chain module and other aspects of inventory management, you can log in to Zapinventory and understand these things in detail.

Also Read: What Is Supply Chain Management And What Are Its Benefits?

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