Supplier Relationship Management Systems

SRM can be said to be the process of strategic planning and management of transactions between the company and a third party supplier of goods and services for the purpose of obtaining maximum value from the trades. In other words, it involves creating a closer, friendlier relationship with a supplier to reduce risks and to uncover new values.

Developing a good supplier relationship management systems ensures both the value of the vendor and the company are ranked higher in terms of competitiveness (Jacoby, 2009). Most of the solutions in the business industry worldwide are solely driven and determined by the level of technological advancements as they provide responses to the strategic needs of the company and organizations.

In order to be a world-class organization, the business solutions have to adopt a technology as a solution to the numerous challenges that crop up in organizations today. Developing an SRM system creates more value to organizations by providing three different realms of benefits to both the supplier and the company.

  1. Processing advantages
  2. Technological advantages
  • People benefits

In order to understand the efficiency due to SRM, it is vital to note the challenges an organization faces during procurement and delivery (Wisner, Tan & Leong, 2012). The main advantage of developing a supplier relationship management system is to ensure smooth running by enabling timely supply and rapid delivery. For example.

  1. It saves time. With this system, the requisitioners don’t have necessarily to call the procurement department in order to monitor the status of their procurement. They rather use the check status button on the system in order to find out the procurement position.
  2. It also allows the supplier to verify the situation of the invoices as well as viewing the payments that have been made. This case practically reduces the time and resources that could have been used by both of the departments in handling orders, payments, and the calls that would have been made.
  3. SRM systems also reduce costs related to the errors in procurement processes, therefore, increases productivity and adequacy in the internal control systems.
  4. It replaces the long, time-consuming process of requisitions and do away with unnecessary delays therefore fostering efficiency in the organization.











Jacoby, D. (2009). Guide to supply chain management. New York: Bloomberg Press.

Wisner, J. D., Tan, K.-C., & Leong, G. K. (2012). Principles of supply chain management: A balanced approach. Mason, OH: South-Western/Cengage Learning.

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