Supplier Relationship Management Created by: J. Russell Haynie
Brigham Young University Slide 2 AGENDA -Definitions -Building
Solid Relationships -SRM Systems -SRM System Capabilities
-Brainstorming -Toyota/Honda Example -The Bottom Line -Works Cited
Slide 3 Definition -A comprehensive approach to managing an
enterprise's interactions with the organizations that supply the
goods and services it uses. -SAP Slide 4 The Power of Trust
-Company Strength Trust is stronger than fear. Partners that trust
each other generate greater profits, serve customers better, and
are more adaptable - Nirmalya Kumar - Proctor and Gamble Example
Slide 5 SRM Systems -Spend Analytics - Are we using cash wisely
with our suppliers? -Sourcing Execution -Are we using the correct
suppliers based on our needs? -Procurement Execution -Are we
getting the right materials from our suppliers? Slide 6 SRM Systems
-Payment -Is the current payment method conducive to our needs?
-Supplier Scorecarding -How do our suppliers match up when compared
to important attributes? -Performance Monitoring -According to our
expectations, how well are our suppliers meeting those
expectations? Slide 7 SRM System Capabilities: Allowing a company
to grade suppliers through computerized date to: -Create spend
transparency -Develop detailed profile of supplier base -See more
opportunities for sourcing materials and services -Prioritize
suppliers on company's desired attributes -Ensure the quality of
purchased items -Ensure appropriate levels of supply Slide 8
Brainstorming Exercise Game Theory Exercise -How would you use SRMS
from the companys and suppliers point of view. -What are the
benefits to having trust? -Are there benefits to acting non-
trusting? Supplier Company Trust Not Trusting 8, 8 10, 1 1, 101, 1
Slide 9 Toyota and Honda -Survey of Principle Measures of
Manufacturer-Supplier relations in the U.S. Auto industry -
Toyota/Honda ranked 1 st and 2 nd as most preferred companies to
work with because: -Better Communicators -More Trustworthy -More
Concerned with suppliers profitability -US companies avg. of 2-3
years for new car design while Toyota/Honda had avg. of 12-18
months. -Promoted Innovation Slide 10 Toyota and Honda -Both Toyota
and Honda have used the same American suppliers as Ford, GM and
Chrysler. -What did they do different? Slide 11 -Understand your
suppliers competency. -Learn about suppliers business -Supervise
suppliers -Provide constant feedback. -Develop suppliers
capabilities -Help supplier innovate and problem solve -Share
relative information -Insist on accurate data -Use meetings to
problem solving and learning -Improve supplier practices -Exchange
best practices with suppliers Toyota and Honda Slide 12 Quotes
Honda is a demanding customer, but it is loyal to us. American
automakers have us work on drawings, ask other suppliers to bid on
them, and give the job to the lowest bidder. Honda never does that.
CEO, Industrial fasteners supplier to Ford, GM, Chrysler, and
Honda, April 2002 In my opinion, Ford seems to send its people to
hate school so that they learn how to hate suppliers. The company
is extremely confrontational. After dealing with Ford, I decided no
to buy its cars. - Senior Executive, Supplier to Ford, October 2002
Slide 13 Quotes Continued Toyota helped is dramatically improve our
production system. We started by making one component, and as we
improved, Toyota rewarded us with more orders for more components.
Toyota is our best customer. - Senior Executive, Supplier to Ford,
GM, Chrysler, and Toyota, July 2001 Slide 14 The Bottom Line
Strategic Supplier Relationship Management adds value to your
company by bettering your interaction with suppliers. Trust and
information flow are key to the successful relationship. Slide 15
Works Cited - Enright, J. Michael (2003). Buy-Supplier
Relationships. Centre for Asian Business Cases, The University of
Hong Kong. -Foster, S. Thomas. (2010). Managing Quality Integrating
The Supply Chain 4 th Ed. Upper Saddle River, NJ: Prentice Hall.
-Kumar, Nirmalya (1996). The Power of Trust in Manufacturer-
Retailer Relationships. Harvard Business Review. -Liker, Jeffrey K.
and Thomas Y. Choy (2004). Building Deep Supplier Relationships.
Harvard Business Review.
-http://searchsap.techtarget.com/sDefinition/0,,sid21_gci871756,00.html
