Unlocking Value with Supplier Relationship Management Practices A case study of how to utilize SRM as a competitive tool

Abstract

Supplier Relationship Management (SRM) is treated as a strategic and holistic approach in order to manage suppliers that are critical or important to the business. The purpose of SRM is to have a long-term relationship where mutual growth and increased value can be achieved. A case study was performed at a Swedish manufacturing company, where 13 qualitative semi-structured interviews were conducted. The purpose of the study was to investigate how SRM can empower the purchasing and supply management in a global manufacturing company. In order to do so, the current state of SRM operations as well as the best practice of tools and processes from literature was identified. The study was conducted in order to provide improvement areas and suggestions of how the case company can generate additional value and gain process efficiency from SRM activities. The findings synthesize that SRM concern five key areas that are interrelated and needs to be worked with as a whole in order to succeed with SRM practices. The five areas that respectively consist of several tools and managerial implications are Holistic Approach to SRM, Segmentation of Suppliers, Relationship Management, Performance Measurement, and Supplier Development. The result of the master thesis shows that there is a great potential of implementing SRM in the case company. Many things can and need to be done in order to unlock value. A starting point is to follow the nine recommendations that were suggested in the end of this report which that concludes the results of how SRM can empower the purchasing and supply management in the company. The recommendations regard the following areas: Orientation, goals and vision, Coordinating purchasing, Segmentation, Governance structure, Managing relations, Key Performance Indicators, Review meetings, Procure-to-pay process efficiency and Internally follow up SRM.