Strategies for Sustainable Buyer-Supplier Relationships: Long-term shared value

In a recent guest post article by Mudassir Ahmed in Spend Matters, there was a discussion regarding the strategic ways to improve supplier relationship management.

One of the two strategies he outlines for improvement importance struck my interest considering it’s something that many large supply chains know about, but very few supply chain experts talk about.

This is the phase of selecting suppliers for development.

Supplier Relationship Management is usually spoken of as a process for holding suppliers to standards and assuring quality on meeting performance and cost needs. Ahmed’s suggestions remind us that SRM is not a linear model, but rather a circular one, as many relationships are.

Developing strong relationships with suppliers takes time and further development past the initial performance assessments or a yearly financial evaluation. Supplier Management and development only happens when there is engagement in the buyer-supplier relationship past a transaction of goods and/or services.

One of the points Ahmed outlines is that SRM functions at its best when there is a strategic initiative to select suppliers for development.

He states, “[…] at Eaton we use a supplier dashboard to understand cost, quality and delivery performance as the key agenda items in our quarterly or annual business reviews with suppliers. These supplier dashboards also serve the basis for supplier negotiation in terms of pricing” (Ahmed 2017).

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