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Sourcing & Suppliers

Supplier Relationship Management (SRM)

Also known as: SRM

Supplier relationship management (SRM) is the discipline of managing and improving relationships with key suppliers to maximise the value they deliver.

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SRM segments suppliers by importance, sets performance expectations, holds regular reviews and works collaboratively on improvement and innovation. It recognises that a handful of strategic suppliers often account for the majority of spend and risk, and deserve more active management than transactional ones.

Effective SRM turns a supplier from a simple order-taker into a partner — improving quality, reliability and cost over time. It relies on good data: performance scorecards, spend visibility and clear service-level expectations captured in contracts.

Frequently asked questions

What is supplier relationship management?
SRM is the structured management of relationships with important suppliers — segmenting them, measuring performance, holding reviews and collaborating on improvement to get more value from the relationship.
Which suppliers need active relationship management?
Strategic and high-spend or high-risk suppliers benefit most. Low-value, easily replaced suppliers can usually be managed transactionally through a catalogue or marketplace.

Go deeper

Supplier management guide

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