May
26
Supplier Relationship Management is a toolset designed for managing the relationship with your suppliers on a collaborative basis to ensure that the relationship is as constructive and indeed productive as possible.
However, it is important to view this as a strategic management tool that needs to be implemented in a structured fashion. It is not simply about ‘cosying up’ to the supplier; it is about a relationship that is fruitful and mutually beneficial.
It is therefore important to adopt a strategic approach to this relationship and to establish a framework for managing the relationship encompassing all the different aspects of the relationship. SRM depends on each supplier having a tailor made relationship with the customer. It may take time to establish an effective SRM, but the rewards can be significant and long lasting.
Typical aspects that are managed as part of the relationship are:
Value:
Value is integral to the supplier relationship, primarily because the whole relationship is based on the value added by the supplier. This might be in the form of price, product or service levels. Value needs to be a central concept within the supplier relationship.
Communication:
Communication is perhaps the key aspect of any supplier relationship. Various SRM technological tools are on the market to assist with implementing the relationship and SRM technology is developing quickly, which will offer even greater choice. However whatever the delivery mechanism exchanging information should be carried out in a clear and concise way.
Segmentation of Suppliers:
There is no single supply chain within any company so the supply chain has to be broken down into different segments. This ensures that the specific relationship with a supplier is appropriate in terms of what is being supplied. To bring it down to simplistic levels, you will want to manage suppliers who provide your cleaning products, differently from a supplier who equips you with 50% of your raw materials.
Resources:
There are different resources that are needed to ensure successful relationships are formed. Resources tend to be focused on the key personnel who need to work on a collaborative basis to establish SRM. These personnel need to have knowledge of the market, the risks that are involved and expertise within the commercial arena.
Accountability:
Akin to resources is the concept of accountability which requires senior management to take control of SRM and to be accountable for the process being successfully implemented; without this accountability there is a danger that the strategy can be allowed to wither and die. Few businesses have staff who only deal with SRM. It is usually something that someone does in addition to their other duties, which means that it is often regarded as a ‘bolt on’ to their jobs. So it needs a driving force behind it and accountability will act as that driving force.
Governance:
Governance is the framework for implementing SRM and is important with regard to ensuring that different segments of the supply chain are subject to different means of governance. It is not suitable to use one style of governance with different suppliers. So this has to be given some time and attention and at least initially, it can feel time consuming, but it is worth the effort in order to ensure the best governance for each segment.
Risks and Challenges
Inherent to any SRM are the natural risks and challenges that exist when customers have suppliers. These can never be completely eliminated and should always be acknowledged rather than being swept under the carpet. If there were no risks and no challenges with regard to SRM, it is possible that the process would be of little worth, but this is a way to manage those risks!
May
26
Things To Consider In A Buyer’s Job Description
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Any buyer’s job description needs to be carefully crafted to ensure that it reflects the needs of the company. Buyers are key players in any procurement strategy so it is important to make sure that the job description helps to attract and secure someone who is multi-skilled and able to craft a robust procurement approach.
There are some misconceptions about the role of a buyer with people assuming that it is simply about driving hard bargains and being a key player in getting the highest number of goods for the lowest possible price; the role of a buyer is actually much more complex than that.
The first thing to consider incorporating into a buyer’s job description is the requirement for the employee to develop the organisation’s procurement and purchasing strategy. Although any organisation should have a procurement or purchasing strategy, it is always worth encouraging buyers to develop this, in line with the aim of achieving continuous improvements to the company.
Next the buyer will need to liaise effectively with suppliers and manufacturers, as well as internal departments and even customers. So this needs to be included in the job description because effective liaison with such a number of different groups requires a strong set of communication skills, mainly due to the fact that all these different groups will often have different and even potentially conflicting needs, so strong communication skills are required.
Slightly separate from the strong relationships that the buyer has to have with suppliers s/he also needs to be able to negotiate effectively with suppliers and potentially even with internal departments, so this should be reflected in the job description. It is also critical that this is highlighted as negotiating effectively, not simply able to secure the lowest price or driving a hard bargain; the skill required is being able to negotiate effectively!
The job description should include a directive that ensures the buyer establishes and maintains strong and trusting relationships with suppliers. This is a prerequisite for a stable supply chain, which is why it needs to be included within the job description.
Yet there are other tasks that also need to be included within the job description. For example, the buyer will be required to analyse price trends and assess their impact on future activities as well as continuously develop market knowledge. This is vital because buyers need to know what is happening at market level and then use this knowledge to help influence procurement activities within the organisation.
Part of this analysis will involve interpreting statistics and translating them into data for the company, so the job description should spell out that the ability to analyse and interpret statistics is vital to the role.
Buyers also need to be able to ensure that quality standards are maintained. In other words there is no point having a buyer buying goods that are not fit for purpose. The quality of the items is important and the buyer needs to understand quality processes and standards.
It is usually a prerequisite of a buyer’s role that they can give presentations. This could be to suppliers, to senior management within the company or even to customers. So the buyer needs to be able to give high quality presentations, after all they are representing the company and they also need to use technology to ensure these have a very professional slant.
So the job description for a buyer is actually very extensive and one that involves a number of different, but highly skilled roles and the job description must be reflective of this highly complex, but extremely important position within the company!