What Are The Types Of Supplier Relationship Management?

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Codependency is a part of every industry and helps you understand the depth of the supplier and buyer relationship. Although the product enables you to make sales, it is also essential to consider the supplier’s contribution to this process. 

Without the supply of good quality raw materials and delivery of material on time, the process would or may not have achieved the level of success it currently has, which the supplier should be credited for. This process allows you to create a relationship built on strong values of understanding every person’s role in the company. 

This falls under the umbrella term of supply chain management but is a part of an approach called supplier relationship management or SRM, which focuses on maintaining healthy relationships with vendors that are a vital part of your organization. 

A healthy relationship means that it is favorable to all parties. This approach was coined to help businesses understand the value of the relationships they create and how they can benefit your business if you enhance them. 

Companies are going global, including taking measures to ensure that your business is profitable on all ends. Several types of SRM have helped enterprises maintain a hospitable environment for their vendors over time. The two types of SRM allow you to manage your goals and expectations as a company- 


This is a traditional supplier relationship that involves the sellers and the buyers. Common examples of vertical supplier relationships would be retailers or other distributors that function daily. For example, if you have a clothing business, your suppliers would include fabric and other supplies more frequently, ensuring the supply chain achieves the necessary goals. 


Unlike the traditional supply chain method, a horizontal supplier relationship includes working with various suppliers that are efficient in their product working for a larger company. For example, if you have a tire manufacturing company, you would want to partner with a car company with suppliers for brake pads or other car parts. This is done with mutual trust and risk at the same time to achieve shared success. 

How Does Srm Help An Organization, And Why Is It Important? 

The most well-known reason is that SRM is known to increase or improve the value shared within the supplier-buyer relationship. As you know, the company can only profit if the supplier is good and the material provided is good, and when the company goes through a loss, so does the supplier. 

This helps you understand that maintaining a healthy relationship or symbiosis with your enterprise’s partners is vital for the business to grow. This is where SRM plays an important role. The SRM system makes the supplier feel more valued and increases the supplier’s loyalty and priority to the organization. 

With this unique approach, you can identify problems that may arise with a vendor with the data recorded in the system, which helps you tackle the problem and maintain excellent relationships with the suppliers.  

Summing Up:

Supplier relationship management is an approach that gives businesses time to focus on strategic plans to continue the supplier-buyer relationship without causing problems for any side of the party. A good vendor is difficult to find, but an SRM system is way more manageable and affordable, so investing in this will benefit your company. 



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