Developed supplier relationship management brings in the big bucks

New research suggest that companies with more highly developed supplier relationship management (SRM) make more money
Developed supplier relationship management brings in the big bucks

Procurement and supply chain consultancy State of Flux has published a report that suggests developed supplier relationship management is giving companies a financial advantage.

The Journey to Customer of Choice, which was completed by more than 500 companies over 20 sectors, revealed that nearly 50 percent of those companies which were considered ‘leaders' (those with the most developed SRM) were reporting benefits of four percent or more of contract value. These leaders are also likelier to get preferential pricing and access to innovation.

The report states: "Leading companies are demonstrating better alignment to business objectives and increased benefits. Their investment in SRM is resulting in more collaborative and open supplier relationships.”

Chairman and founder of State of Flux, Alan Day said: “The key question has always been ‘what’s the business case for SRM?’ and we now have numbers that support a business case.”

According to the report, under 20 percent of the total respondents to the survey said they they had robust supplier performance and contract and risk management in place for more than 75 percent of their suppliers. The research noted this as an area requiring “urgent attention”.

The research found that 68 percent of respondents believe that the responsibility for SRM lies with procurement. Eighty-five percent believed SRM would become more important within a year, mainly because they believed that there would be a move back towards more strategic priorities in line with the global economic recovery.

The study went on to highlight the fact that there seemed to be a deficit of people with the necessary skills, resources and budget to develop their SRM practices. 


by Laura Stackhouse Editor

Laura Stackhouse is the Web Editor of, an official publication of the International Marine Purchasing Association (IMPA). To discuss news, features or contributing to please get in touch.

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