What Does SCRM Mean for Supplier Relationship Management?
Supplier relationship management is by no means a new concept in the procurement world. Neither is consideration of risk as part of supplier relationship management—but the demands of risk in SRM have grown and changed. Traditionally, procurement professionals have focused primarily on financial health to mitigate risk. As globalization and supply market volatility increase, however, the requirements behind what makes a good supplier relationship management strategy are shifting.
Here’s the bottom line: If you’re not enhancing your SRM program with risk management capabilities, then you’re leaving your organization more exposed to risk than ever. The traditional ways of managing your suppliers aren’t enough. You need to consider more types of risk, more sources of information and more risk from your sub-tiers. It’s time to move your SRM to the next level by establishing an SCRM strategy.