Supplier Management
Introduction
Supplier Relationship Management (SRM) —supplier relationship management— (suppliers, creditors) is a term that describes the methods and processes of a company or institution that acquires products and services to establish positive relationships with another company that provides them. This may involve obtaining supplies for internal use, raw materials for consumption during the manufacturing process, or acquiring inventory goods to be resold as products in distribution and retail.
The supply management function of an organization is responsible for the acquisition of goods and services for the organization. In many organizations, the acquisition or purchase of services is called "contracting", while that of goods is called "purchase" or "acquisition".
Supply management primarily refers to the supervision and management of input materials and services, the management of suppliers that provide the inputs, and the support of the procurement process of those inputs. The performance of supply management and supply management professional services is measured in terms of the amount of money saved for the organization. However, risk management is one of the other critical aspects of supply management, especially the risk of non-availability in the required time of quality goods and services critical to an organization's survival and growth.
History
Before 1900, purchasing operations were recognized as independent functions of many railway companies, but little extended to companies in other sections.
Before World War I, purchasing operations were considered primarily acts carried out by the clergy.
During the First and Second World Wars, the importance of purchasing operations increased due to the emerging need to obtain raw materials, supplies and other services necessary to maintain operating factories and mines.
During the 1950s and 1960s, purchasing operations continued to gain importance, and with it the techniques for performing these operations became more refined and the number of trained professionals increased.
During the 1970s and 1980s, emphasis increased on pursuing purchasing strategies, such as the ability to obtain raw materials from suppliers at more affordable and realistic prices.
In September 1983, published a pioneering article by Peter Kraljic on purchasing strategy that is widely cited today as the beginning of the evolution of the term "buying" and what it entailed. This article served as the basis for developing management and acquisition tactics, as well as various business strategies.