What is "supplier relationship management" (SRM)?

Supplier Relationship Management (SRM) is best defined as the systematic approach to developing and managing partnerships with suppliers. This concept is crucial in supply chain management, as it emphasizes the importance of collaboration and strategic partnerships to enhance efficiency, drive innovation, and create competitive advantages.

Effective SRM involves understanding the supplier’s capabilities, aligning their objectives with the company's goals, and fostering effective communication. By establishing strong relationships, organizations can improve supplier performance, reduce risks, and ultimately enhance the value delivered to customers.

The focus is on nurturing long-term relationships rather than transactional interactions, which can lead to mutually beneficial outcomes such as improved product quality, better delivery performance, and potential cost reductions through joint efforts in innovation and process improvement.