Eskom Procurement Book 2015

SUPPLIER RELATIONSHIP MANAGEMENT

5.3.3.2 Determining the Suppliers

SRM is typically focused on the organisation’s interconnection with suppliers who provide either high volumes of a common product/service or smaller quantities of crucial ones. In addition, it is also applicable to suppliers that serve more than one business unit of a company or organisation, or where intensive engineering, manufacturing and/or logistics interaction is essential. This suggests that among a portfolio of suppliers, SRM efforts are directed only at suitable ones.

5.3.3.3 Application of SRM

In the past, SRM often became significant only when a sourcing issue or opportunity arose, such as when there was a looming shortage of a crucial raw material. However, in current times SRM has become an everyday sourcing mechanism.

5.3.3.4 Multiple Roles and Responsibilities of SRM

Generally, SRM reaches into many areas of the enterprise and performs a multi-dimensional mix of roles and responsibilities, as illustrated in Figure 5.2.

Figure 5.2: The roles and responsibilities of SRM.

5.3.4 CHALLENGES ASSOCIATED WITH SUPPLIER RELATIONSHIP MANAGEMENT

A variety of challenges confront SRM. After all, if the process were easy, all firms would routinely excel at it.

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