Supplier Relationship Management: How to Maximize Vendor Value and Opportunity

There’s a new buzz phrase in the air: Supplier Relationship Management (SRM). Corporate executives know it’s necessary, but there’s only one problem. Nobody yet knows how to do it. Or they think it’s all about bashing your vendors over the head until they reduce the price another 4%. Supplier Relationship Management: How to Maximize Vendor Value and Opportunity changes all that.

Containing the best and most innovative advice from the operations and procurement experts at consultant AT Kearney, this book shows that SRM is at root a strategic discussion requiring cross-functional interaction and internal alignment at the highest levels. It requires an honest appraisal of the value that suppliers now bring to your firm, as well as their potential value. It then requires a frank and constructive business-to-business dialogue about how to improve the relationship. When this happens, a company reaps myriad benefits, ranging from new opportunity to added value to competitive advantage—and, quite likely, to overall (and sometimes substantial) cost reductions.

This book shows the most concrete methods you can use today to:

• Identify value-adding opportunities in the supply chain
• Work closely with suppliers to maximize the benefits
• Work the “Critical Cluster” of suppliers, where the greatest opportunity for advantage lies
• Review suppliers to encourage constant gains in quality and cost
• Turn your SRM strategy into a major competitive advantage

Supplier Relationship Management introduces and explains the Supplier Interaction Model, a key tool that will help you get the most from your supplier relationships. It segments the supplier universe into nine categories, from those you want to run away from fast to those so good and so useful to your organization that it can make sense to invest in them directly. Numerous case studies show how to apply the principles to your situation.

Supplier Relationship Management burns off the fog that has surrounded the procurement process for far too long. It is the definitive guide for business executives who want to get the maximum benefits from suppliers and gain very real advantages over competitors.

What you’ll learn

• How to manage supplier relationships to promote efficiency and improve profitability
• How to tap into opportunities by working more strategically with the “Crucial Cluster” of high-performing suppliers
• When and how to apply true partnering approaches to maximize the benefits for both organizations
• How to identify the suppliers who will provide the greatest long-term value
• When to look to suppliers for innovation and better practices
• How to turn supplier management into a true competitive advantage

Who this book is for

Chief procurement officers, operations managers, purchasing officers, supply chain executives, C-level executives, and non-procurement managers who need to understand how to save money and grease operations by managing supplier relationships better.

About the Authors

Stephen Easton leads the A.T. Kearney procurement team in the UK, and he is based in London. He joined A.T Kearney 14 years ago, focusing on working with clients to improve the effectiveness of their external procurement activity. He has supported a number of both private and public sector clients to achieve significant and sustained financial results. Stephen has an MBA from Cornell University and a first degree in Politics, Philosophy, and Economics from the University of Oxford. He lives in Surrey, southwest of London.

Mike Hales is senior partner with AT Kearney based in Chicago and with over 35 years of industry and consulting experience working extensively in North America, South America, Europe, and Asia Pacific. His global cross-industry experience covers all aspects of operations (innovation, supply management, manufacturing, logistics), support services, sales channel, customer experience, and merger integration. He has a special focus on expanding the impact of procurement from sourcing to supplier relationship management. He has contributed to over 20 articles on procurement, innovation, customer experience, and channel strategy. He serves on the Corporate Steering Committee for The Chicago Council on Global Affairs (for 10 years). He is co-author of the Global City Index, which periodically ranks 66 cities (since 2008). Mike is also on the Board of Trustees for the Institute of Supply Management's Center for Strategic Supply Leadership. Mike holds a B.S. degree with honors in business from the University of North Carolina at Chapel Hill, and a Masters in Management degree with honors from the Kellogg Graduate School of Management at Northwestern University. He has passed the exams for the Illinois Public Accountancy and American Production and Inventory Control Society.

Christian Schuh is the leader of A.T. Kearney's Supply Management Practice in EMEA and is based in Vienna, Austria. He joined A.T. Kearney 17 years ago and has since then led multiple projects for clients in the automotive, construction equipment, defense, high tech, packaging, and steel industry in Austria, China, France, Germany, Russia, the UK, Ukraine, and the USA. His areas of expertise include strategic sourcing, high-end R&D, and organization. He is the author of various books (most notably The Purchasing Chessboard), monographs, and articles. Before he joined A.T. Kearney, he worked several years for Unilever. Schuh studied aeronautical engineering at TU Graz (Austria) and holds a doctorate in business administration. He lives in the historic city center of Vienna.

Michael F. Strohmer is a member of A.T. Kearney's Operations Practice and leader of the European raw material competence team. He is based in Vienna, Austria. In his 11 years with the firm, he has led projects at a broad range of international clients, mainly in post-merger situations. His work encompasses the utilities sector, automotive, defense, consumer goods, packaging, and steel. He is an expert on raw material strategies, procurement transformation, post-merger management, and large-scale CAPEX projects. He has published several books (including The Purchasing Chessboard) and articles, and is a frequent speaker at international conferences. Strohmer holds a doctorate in business administration and law. He lives in Austria's picturesque lake region near Salzburg.

Alenka Triplat is a member of A.T. Kearney's Operations Practice. In ten years with the firm in Vienna, Austria, she has led multiple projects on supply management topics across various industries, such as discrete manufacturing (consumer electronics, food consumer products, and heavy equipment), process industries (steel, gas, cables, packaging), and financial institutions (commercial banks and insurances). She has worked with international clients based in most European countries and spent longer periods of time working and living in the USA, China, and Taiwan. She is an expert in wide range of supply management topics (sourcing strategies using the Purchasing Chessboard, negotiation techniques, procurement transformation) as well as cross-functional collaboration and manufacturing excellence. She also published multiple articles on these topics. Alenka Triplat studied economics at the University of Ljubljana (Slovenia) and business administration at Vienna University of Economics and Business Administration (Austria). She currently shuttles between Shanghai, Vienna, and Ljubljana.