How can you manage the buyer-supplier relationship

Supplier Relationship Management: How to strengthen your supplier relationships

Supplier Relationship Management (SRM) comprises the strategic planning and control of relationships between a company and its suppliers. In many companies, relationships with suppliers become more complex as the size of the supply chain increases. Thanks to Supplier Relationship Management, also known as supplier relationship management, companies can ensure that they invest in the relationships that are most important to their success. In the following we explain the importance of supplier relationship management. We explain what types of supplier relationships there are and how companies can strengthen relationships with their current suppliers.

The importance of supplier relationship management

As with any other relationship, both partners in a B2B relationship are interested in value creation and profitability. How you work with your suppliers can have a direct impact on the efficiency and productivity of your supply chain. However, building close relationships with suppliers should not be left to chance, but requires targeted and strategic efforts.

With a successful supplier relationship management strategy, your company benefits from the following advantages:

Types of supplier relationships

There are two main types of supplier or collaborative relationship. Find out what type of relationship you have with your supplier. Then you can set the right expectations and set realistic goals more effectively.

As with any relationship, the closeness of cooperation and the form of cooperation differ depending on the intended outcome.

There are mainly three forms of cooperation:
  • Providers - These relationships are primarily transactional in nature. Here both parties act as buyers or sellers. Outside of the transaction, cooperation is rather limited or nonexistent.
  • Strategic alliance - Strategic alliances bring companies closer together. It is a long-term, formalized relationship between several cooperation partners. The companies work together and align their processes with common goals. In this case, the relationship is more strategic and less transactional.
  • Partnership - In partnerships, all parties work closely together and even align business strategies with one another for better results. The mutual success here is usually greater than what any individual partner could achieve alone.

Why companies should deal with supplier relationship management

In addition to the advantages already mentioned, companies should definitely invest in their supplier relationship management so that the relationships that have already been established are preserved. It is usually cheaper to strengthen existing relationships than to cultivate new ones.

The Tradeshift platform provides optimal support for your supplier relationship management

The Tradeshift Engage platform supports companies in digitizing their supplier relationships. The intelligent onboarding tool takes into account the appropriate time and context for an invitation to join the network platform. As a result, suppliers feel valued from the very first day of cooperation. Tradeshift Engage is not just another portal imposed on your suppliers. Even before your suppliers have access to an account on this network platform, you can already gather valuable insights into their payment and transaction history.