5 Key Skills Needed from an Effective Supplier Relationship Manager (Part 3 of 4)
Ethan Healy
Ethan Healy Junior Consultant

Welcome to part 3 of the series on the key capabilities needed to be an effective Supplier Relationship Manager. Knowing what capabilities are required is what will help you become superior when managing suppliers and vendors, transparently and collaboratively.

Preface

The purpose of having a Supplier Relationship Manager in place is to ensure that your IT and Procurement Department has the ability to gain oversight and effective management of all your key supplier and vendor relationships. This includes; having the ability to implement rigorous controls to manage operational risk, obtain the best value for money from strongly negotiated contracts, and improve delivery efficiencies from your vendors through transparent and collaborative working.

An effective supplier relationship manager will require being able to manage a portfolio of IT suppliers and contracts that they own dependant on your business’s strategic aims.

There is always going to be a strong element of service lifecycle management within the role if you were to base your management around an efficient software solution. Supplier relationship managers would need to have an appreciation and working knowledge of the Information Technology Infrastructure Library (- a guide containing best practices in set modules on the IT Infrastructure needed to easily sustain and develop an effective set of technological processes.) Across the series is the 5 key areas which are key in establishing the maximum value and ability to sustain a role as a Supplier Relationship Manager, both in running a team of SRM members and on being an individual owning a set of suppliers or vendors. After out second blog, we now will look at Service Delivery Support.

3. Service Delivery Support

In order to ensure you are able to underpin service delivery effectively in both time and productivity, you need to be able to build on a number of different traits:

To fully accompany your vendors and ensure they are tracked against any contractual obligations in place with the business, use scorecards, performance reviews and other metrics. These should be collated through a one-base dashboard, measured against the service level agreements in place with those Vendors.

Supporting the delivery of services from your vendors is effective when making sure your SRM function obtains regular feedback from those supplier relationship managers taking ownership of vendor portfolios and their track records. This ensures that the SRM function is influenced to regularly track their vendors’ performance overall and therefore allow for any further action to be taken if vendors are underperforming or are not fulfilling obligations of the contract agreement. Ultimately, the continuity and efficiency of operations are maintained, where vendors are consistently monitored and shown an indication of your business taking their services seriously in their contribution to the business’s strategic aims.

It is also important to provide what is known as the escalation point of the supplier management chain. This is a process which follows procedures, outlined across recorded documents, based on the vendor and their alignment to expected performance, contractual agreements and regulations, and strategic aims and goals of the business. It also highlights the bundle of results created in order to get an overall judgement of the vendors long-term performance, and whether it is worth staying loyal in the long run or finding someone else to be even more efficient based on market intelligence. Examples of data in the escalation process include diagrams showing the average value gained from your vendors individually across the timescale (ideally monthly) in which they have an agreement with your business. These escalation points should be distributed fairly, dependant on the vendor and their product or service provided to the business, and the supplier relationship manager that is running the related vendor portfolio should also take responsibility.

Finally, the management of service delivery has to assure that there are regular review meetings in place based on the vendors’ services, initiating and agreeing upon service improvement plans where necessary. This relates back to comparing those services offered to the business against the established principles in which the business and the vendor have agreed upon, including all values and important procedures your company has in place no matter what service it is that the vendor is providing. This helps to add to the ability to build and sustain strong vendor relations with the vendors and boost the drive of internal teams and bring strategic value across your business.

 

We hope this blog was helpful in giving you the support to drive a successful SRM function. This is the third of 5 blogs focused on the necessary skills of an effective supplier relationship manager. Be sure to look out for part 4 of this series, looking at skills focused around Risk Management and Service Design.

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