Pillar 1 of SRM begins with Strategic Category Management and analysis of the external landscape. This critical first step in the SRM process allows you to build insights and draw conclusions based on market conditions for the specified category. The level of market risk and business value helps determine how to strategically manage suppliers to minimize risk, maximize value, and drive competitive advantage.
Pillar 2 is focused on typing the relationship and begins with Strategic Category Management and supplier categorization. This critical second step in the SRM process allows you to build insights and draw conclusions based on the unique suppliers in your category. The level of dependency and attractiveness of the suppliers in a category, along with risk and value, helps determine how to strategically manage suppliers to minimize risk, maximize value, and drive competitive advantage.
Pillars 1 and 2 are part of the SCM process. Pillar 3 is the first unique pillar of SRM. It consists of defining the engagement level in order to identify activities for Performance Management, Risk, and Collaboration. To assist with the process, the SRM Tiers are overlayed on the SCM matrix to show how SRM maps to SCM. The levels shown provide guidance, and there is a Resource Guide to SRM Tiering available to help guide your decision-making process.
Pillar 4 is focused on the development of your SRM strategy and an engagement plan that delivers value for both parties. This step also includes setting goals and objectives for the relationship.
SRM has a fit for purpose approach to ensure the right level of strategic thinking is placed on our most critical supplier relationships.
Performance: Develop metrics to ensure the supplier relationship is delivering value
Risk: Assess the level of risk and steps to help mitigate supplier risk
Collaboration: Determine what to accomplish with your supplier and how to best achieve goals
*Click the links under each pillar for resources
Pillar 5 is focused on the execution of your SRM strategy and implementation of activities to achieve the goals and objectives of the relationship.
Performance: Manage supplier performance and identify opportunities for future improvement
Risk: Implement a risk mitigation plan to ensure our business can continue to run when unforeseen issues arise
Collaboration: Execute the SRM strategy developed for your supplier to maximize value and competitive advantage
*Click the links under each pillar for resources
Pillar 6 will leverage the existing SCM annual review and approval process. This enables consistent reevaluation of the engagement levels in the event of market and segmentation changes. It also helps drive ongoing cross-functional alignment.
