Global Supplier Relationship Management

Supplier relationship management capability in global supply management

PurchTips Edition #447

Global Supplier Relationship Management


Supplier Relationship Management refers to the management of the interactions between suppliers and buying organizations. All buying organizations have SRM. The nature of buyer/supplier relationships varies from organizations to organization.

The following are characteristics of an effective SRM Program:

  1.   Customer Requirements Focus

Proactive and Forward-Thinking Organizations underpin their operations and systems by their Critical Customer and Shareholder Requirements, which serves as the input criteria for supplier selection processes. These requirements also serve as inputs for contractual agreements and remedies.

  1.   Total Cost to Serve Focus (TCTS)

Total Cost to Serve is the identification of the cost of servicing customers at the product and customer levels. (SPSM4 Executive Leadership Course, 2019). The primary objective of Total Cost to Serve is the configuration of business and procurement systems to deliver customer requirements in the most cost-effective manner. Leveraging TCTS requires managing and ensuring supplier capability to effectively contribute to realizing customer and shareholder requirements.

  1.   Risk Mitigation Focus

The execution of Risk Management Strategies is a critical dimension of the Procurement Function. Effective

GSRM Programs ensure that only low-risk suppliers are selected and continue to pose low risks level to supply mechanisms. The degree of ongoing risks that supplier activity poses to buyer supply chains are a major component of supplier performance scorecards and a key determinant of the continuation of future business. 

  1.   Leverage of Supplier Innovation Capabilities

Managing supplier innovation capabilities are one of the most important aspects of Global Supplier Management Systems. It addresses all aspects of collaboration to facilitate the transfer and leverage of supplier intellectual property, know-how, and process capabilities to buying organizations. The creation of a win-win position is at the core of GSRM systems. Collaboration, customer and stakeholder requirements focus are the hallmark of an effective GSRM initiative.

NLPA Library: Looking for authoritative procurement templates, tools, webinars, and more? Stop trying to create resources from scratch and start taking advantage of having exactly what you need right at your fingertips in the NLPA Library.

Want a More Rewarding Procurement Career?

Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.

Earning your SPSM® Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential.
Download the SPSM® Certification Infopack today to learn how to get started on your journey to a more rewarding procurement career!


Learn More About Procurement Talent Management

Want to know all the details behind world-class procurement talent management? Simply download the NLPA’s new whitepaper, “Procurement Talent Management: How To Recruit, Train & Retain a Modern & Awesome Buying Team.”

You’ll learn the two current approaches to procurement recruiting, how to use the SPSM-BOK® Mastery Model to plan procurement training, and five powerful retention techniques. If you’re a leader attempting a procurement transformation, you must read this whitepaper!


Copyright 2019. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.

By David Millington, SPSM, SPSM2, SPSM3 - Director of Education (Next Level Purchasing Association)


Want to get more procurement articles by email?

Members of the NLPA get great articles just like this by email every month. As a member, you will also get access to:

  • The Procurement Training & Certification Starter Kit
  • The latest Purchasing & Supply Management Salaries Report
  • Leading-Edge Supply Management™ magazine
  • Live webinars
  • Access of Purchasing Community
  • Access of NLPA BLogs
  • Access of Library (Webinar Replays, Procurement Templates & More)
  • Access to All 20 Express Courses worth $380.00
  • And more!

Sign up today and enjoy access all of the benefits that come with the NLPA Premium membership.

Procurement Courses
Over 196,482 purchasing professionals have joined the Next Level Purchasing Association! So, what are you waiting for?