Procurement Intelligence Unit

Is a pretty good Idea!!

In my opinion at these difficult times SRM should be increased!

The whole supply chain is and will be under pressure to keep businesses afloat!

For what is worth!! JB 

Absolutely not! In my view, effective supplier collaboration provides the most benefit when times are difficult as there is a real need/impetus and vested interest by both parties in reducing waste, adding value, embracing innovation and subsequently optimising costs. When the good times follow both businesses shouldl be in a position to maximise the lower cost base opportunities already implemented, those ideas/projects that have been identified but not yet executed and the continuing pipeline of new ideas that are a feature of the ongoing collaboration.The other point I would make relating to SRM/collaboration is that if it is executed successfully then it may well have an influence on whether times are good or bad! 

Kevin, well said! In addition to the above, the suplier should feel respected and valued and should be cleared of misconception about buyer or procurement professional. We are not always focused on cost and does not believe in SELF VICTORY. It is imperative to make supply chain partner believe that the objective of SRM is to build sustainable, long term, fair and equitable partnership.

SRM always works. In today's volatile business environment, supplier collaboration should never be ignored or compromised. For my organization and during my career, it has always worked even during tough times. Cheers

You absolutely can and should exercise SRM during a crisis. This allows you to work with the supplier toward solutions, regardless of 'climate'.

I think it doesnt matter if you are in good or bad time..Healthy & ethical relationship between supplier always works..we just need to treat our supplier like business partner not just vendor..

 I endorse Bharats view,suppliers should be treated as partners,win/win both parties.

Building relationships with your vendors is one of the most important aspects of procurement. Neither the vendor nor the buying organisation wants to see the other going out of business and losing it's revenue stream (direct supply or re-sell) Both parties need to treat each other fairly and with respect, especially as vendors will be more forward in assisting in out-lining where reductions or avoidance in cost might be achievable, providing supplementary assistance in logistics, and assisting orgainisations in emergency purchases. 
However to ensure transparancy in commodity costs, the buying organisation also need to conduct open book costing so costs can be outlined and benchmarked against competitors (the drawback is on bespoke services) and agree GP's with vendors for supply of products or services. 
SRM is important and critical to each others success.

 The fruits of supplier collaboration are often reaped when there is a crisis. Whilst the relationship has been born and developed during the good times this should have laid the foundations to endure the crisis facing either parties

Surely good SRM is even more important in a crisis. If strong relations between supplier and customer have been fostered then adult conversations about a joint solution can be held.

It works better than in peaceful times!! JB

Derek, I could not agree more. One of the key success factors in a true collaboration is trust. Often this is only truly tested in a crisis!

It’s a lovely concept but sadly that’s all it is. SSM and SRM are behaviours attributed to how you mange the contract between two parties. Where one is the dominant party there is no need to have an “alliance” or, dare I use that over utilised yet understood phrase, a “partnership”. 
The reason for SRM working, when a crisis arises is that both organisations have spent a great deal of time and effort aligning their strategic approach, governance and profitability of a contract to one another. Therefore there is a mutual benefit to see the issues resolved to limit the potential exposure. 
When and if the crisis can be resolved, procurement takes the credit for supplier management and the strategic relationship. When and if the crisis cannot be resolved i.e. Kmart in 2000 writing of $130m, IBM’s loss of microchip production to Apple in 2003, either of the contracting parties will only do as much as they are legally obliged under the letter of the contract. If the commercial or reputational exposure is too great, the relationship will fail.

SRM is not just for the good times. In their recent 2011 SRM survey report State of Flux made reference to a “new competitive environment” where the effect of continued economic downturn has led to a situation where customers are competing to attract and retain the best supplier capability. SRM can be key to winning the status of “customer of choice” with suppliers you really want to deal with without making unnecessarily damaging concessions. SRM can create equilibrium and lead to more sustainable business for both parties in the longer term. In my opinion the mutual dependency between strategic suppliers and customers must be turned to the advantage of both to navigate a way through troubles waters.

History is littered with examples of good SRM practice that was abandoned to seek short term tactical advantage – ref: Chrysler rated as world class SRM in 1996 , dumped approach in 1998 when acquired by Daimler-Benz, now re-inventing.

Yes, I am votary to SRM practices. All the long term objectives of the organisation can be fulfilled with improved SRM. This relationship would always be mutually beneficial. To balance tilting, I agree with Mr Richard about use of benchmarked data.

SRM is suitable for any cases actually. It shows even more important in bad period. Both parties must see the long term relationship.

I have maintained SRM in good and bad times and each party has bent backwards when necessary and it was a case of "you scratch my back and I scratch yours" when it was needed. It has actually been very healthy and thru the good times I gave full support to my suppliers as they knew I would be fair and during bad times each one of those suppliers pulled out all the stops to support me as a Purchaser in the time of need.
SRM has been key to my success in the companies where I have worked and always yielded significant savings.