The Impact of Supplier Relationship Management on Procurement Efficiency and Cost Reduction
DOI:
https://doi.org/10.63282/3050-922X.IJERET-V4I4P102Keywords:
Supplier Relationship Management, Procurement Efficiency, Cost Reduction, Supplier Performance, Strategic Collaboration, Supply Chain ManagementAbstract
Supplier Relationship Management (SRM) plays a pivotal role in enhancing procurement efficiency and driving cost reduction within organizations. By fostering strategic collaborations with suppliers, companies can create mutually beneficial relationships that streamline operations and improve overall performance. Effective SRM practices involve identifying and segmenting suppliers based on their strategic importance, establishing clear performance metrics, and developing tailored engagement strategies. This structured approach not only facilitates better communication but also enhances supplier responsiveness, leading to reduced delays and improved service quality. The impact of SRM on procurement efficiency is significant, with studies indicating potential cost reductions of up to 12.7% through improved negotiation terms and optimized supplier interactions. Furthermore, organizations that implement robust SRM processes report enhanced supply chain resilience and reduced operational risks. By continuously monitoring supplier performance and engaging in collaborative improvement efforts, businesses can achieve greater innovation and responsiveness in their supply chains. Ultimately, effective SRM transforms the procurement function from a cost center into a strategic asset, contributing to long-term organizational success
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