Supplier Relationship Management: What It Is, Common Software Features and Leading Solutions

Supply chains are the lifeblood of any business as the value they deliver extends across the spectrum of data, product, services, and information needed to run any operation profitably. Supplier Relationship Management (SRM) software is specifically designed to streamline and optimize the many relationships that manufacturers rely on to build, sell and service their products. By creating a series of applications that form the foundation of a SRM-based system of record, enterprise software companies are setting the foundation for manufacturers and the suppliers they rely on to improve their operations. In turn, this increases quality, gaining speed, scale and accuracy in the process.

Get our Inventory Management Comparison Matrix.

Each company or organization has its series of unique SRM processes and workflows that are highly unique, unlike any other business. As a result, SRM systems often have a wide variation in how they are implemented, yet each of them share strategic roles. Maintaining strategy, managing transitions, implementing projects, monitoring performance, managing contracts and operating solutions are the six main SRM roles that are included in varying levels of each completed implementation.

SRM Stats of Note

Supplier Relationship Management Success Factors

There are many approaches that companies are using to accomplish their SRM goals. Managing suppliers using an evaluation system that takes into account product quality, managing contracts and accelerating their renewals is one method. Managing payment terms and relying extensively on procurement and Electronic Data Interchange (EDI) is another. No matter the approach, the outcomes of investments in enterprise-wide procurement and SRM strategies are significant.  Based on a survey of C-level executives in Deloitte’s SRM study, the following benefits were mentioned the most:

Common Supplier Relationship Management Software Features

Improving product and service quality, delivery times, and supplier enablement performance are the top three priorities supply chain and senior procurement executives are pursuing today. Additional priorities include getting more value out of technology investments, generating greater revenue from services, and streamlining supplier enablement processes. The SRM software community is basing their product roadmaps and direction on these six needs. The result is a series of product features designed to scale across supplier networks globally, enhancing and strengthening relationships as a result.  Today’s most common Supplier Relationship Management application software features include the following:

Bid Management – Integrating bid management into an SRM suite is now becoming more commonplace, as manufacturers are looking to save time by creating, distributing and tracking Requests For Proposal (RFP) and Requests for Quotation (RFQ) from within supplier records. Tracking RFPs and RFQs by the supplier is useful within an SRM system, as it provides a single source of data across the entire supply chain.

Contract Management – One of the most valuable features of an SRM suite or application, contract management is critical to the success of any supplier enablement strategy. The goal of including contract management in SRM workflows is to streamline the contract creation, tracking, and monitoring process. It’s also critically important to know, down to the clause level, what liabilities a manufacturer is liable for as a result of their contracts. The time payoff of having contract management systems within an SRM suite is significant as well, as contracts are often included in a separate, usually isolated system. As SRM systems become more of a system of record for all supply chain activity, fully integrated contract management systems will become more commonplace.

Catalog Management – The most valuable aspect of catalog management is the flexibility of importing data from a wide variety of data formats, data structures, and programs that suppliers use to get transactions completed. Catalog management also supports the cleansing, normalization and quality assessment of inbound supplier data.  Advanced latent semantic indexing (LSI), machine learning and predictive analytics have led to advances in the more reliable usage of supplier data in complex catalog management searches. The most advanced catalog management applications in a SRM suite also support data model definition and flexibility.

Procure-to-Pay – Tier 1 ERP vendors, including Infor, SAP, Oracle, and others, all support Procure-to-Pay. Adding greater optimization of the Procure-to-Pay process is on every SRM vendor’s roadmap, as Tier 1 ERP vendors are investing heavily in R&D to add a greater depth of functionality to their SCM and SRM suites.

Quality Management – In today’s most advanced SRM systems and suites, it’s possible to track the overall quality levels by supplier and products. This is the level of best practices many companies aspire to as a part of their SRM and SCM strategies.  In addition to quality levels of shipments by the supplier, there is also the tracking and traceability of components to the certification level. This makes it possible to do audits quickly using system data, while supporting Corrective Action/Preventative Action (CAPA) process workflows.

Risk And Liability Management Tools and Apps – Managing supply chain risk requires risk assessment and aggregation workflows to be embedded within SRM systems, as well as across a manufacturing shop floor. Using SRM data to predict and evaluate supply chain risk rising out of internal process control and process performance data is one of the most popular ways companies are evaluating supply chain risk and liability. Also, there is the continual adoption of advanced analytics and machine learning to provide insights into the areas of a supply chain that are at the greatest risk. Supplier performance and demand management variability are two factors that are a primary focus of risk and liability assessments today.

Role-Based Access to Each SRM workflow – All SRM suites today provide role-based access to functional workflows and tasks. As SRM systems continually evolve onto cloud-based platforms, they also support mobile-based alerts, task lists, and workflow management applications. It’s now common for suppliers to able to log in and configure specific alerts to the role-based level while tracking their performance against plan. It’s also possible to create mobile-based dashboards that provide insights into the long-term performance of a supplier relative to their own goals.

Support For Creating and Managing Supplier And Buyer Portals – The progression of portal-based technologies continues to accelerate, with the latest generation supporting mobile-based, responsive designs that serve live streaming video of events and have the bandwidth to provide video content. There’s an entire series of role-based content and approval configuration options in the majority of portals today, including integration to track RFPs and RFQs in dashboards. Suppliers and buyers can configure common workspaces as well, including workspaces for sharing data and files for current and future projects. The taxonomy and structure of supplier and buyer portals has progressed to the point where they are now the preferred method for collaboration across supplier networks. Many have Facebook-like chat features that allow for quick communication anytime, anywhere.

Top SRM Vendors

Coupa Cloud Spend Management – Designed to support expense management and e-procurement, Coupa Cloud Spend Management provides a series of SRM reporting, auditing, and intelligent expense management auditing applications. Coupa is highly regarded for their customer service and the rapid pace of innovation in their product strategies.

Infor Supply Chain Management – Designed to support enterprise-wide SCM and SRM strategies, Infor has developed this product to provide a reliable, scalable system of record of supply chain activity. Infor also has extensive supply chain management functionality and support for advanced reporting using its extensive tools and reporting library.

Oracle SCM Cloud – The Oracle SCM Cloud has specifically been designed to scale across large-scale multinational supply chains, enabling manufacturers to attain their SCM and SRM strategies quickly using a unified system. Oracle is the leader in creating an enterprise-wide system of record using SRM data, and their analytics applications, server products, and platform are revolutionizing supply chain intelligence.

SAP Supplier Relationship Management –  SAP’s legacy of extensive expertise in transaction systems is evident in their SRM module. The company has successfully integrated their support for supplier relationship management tracking and analytics with its expertise in real-time integration and depth of expertise in supplier networks. This module is actively being used to alleviate supply chain risk due to rapid changes in demand and supply volatility. It also manages support for specific forecasts. SAP has integrated this module into inventory, shipping and order fulfillment, making it one of the most robust SRM systems available today.

Get our Inventory Management Comparison Matrix.