SCM Unit 11 Flashcards

Flashcards on Supplier Relationship Management (SRM)

What is Supplier Relationship Management (SRM)?

A strategic, process-oriented, cross-functional, and value-creating approach for managing relationships with suppliers to minimize supply disruptions and deliver long-term growth for both buyer and seller.

What are the three types of supplier relationships?

Transactional Relationships (Arm's Length), Collaborative Relationships/Partnerships, and Strategic Alliances.

Describe Transactional Relationships.

Adversarial, win-lose approach where buyers aim for the lowest price and sellers aim for the highest price. Minimal collaboration or information sharing.

Describe Collaborative Relationships/Partnerships.

Buyers and sellers work closely, sharing operational information and challenges but not risks or benefits. Involves high planning and collaboration.

Describe Strategic Alliances.

Goes beyond collaboration, with shared risks and benefits, fostering mutual growth and effective supplier performance management.

The strategic importance of SRM?

Value Creation, Cost Reduction, Risk Management, Innovation and Growth, and Competitive Advantage.

Describe the Reactive Approach to SRM.

Problem-driven, short-term, and focused on addressing issues as they arise with limited information sharing and transactional relationships.

Describe the Proactive (Strategic) Approach to SRM.

Long-term, solution-driven, and market-focused, aiming to minimize risks before sourcing begins with shared risks and mutual benefits.

What are the advantages of Early Supplier Involvement (ESI)?

Reduced Development Time, Reduced Costs, Improved Product Quality, Innovative Technologies, Competitive Advantage, and Joint Resource Dedication.

What are the disadvantages of Early Supplier Involvement (ESI)?

Dependency, Reduced Flexibility, and Information Loss.

What are the steps in the SRM process?

Segmentation, Objectives, Activities, and Evaluation.

Why is improving supplier management systems crucial?

Integration of Processes, Continuous Supply, Cost and Performance Optimization, Risk Reduction, Innovation and Flexibility, and Sustainability and Competitiveness.