Contact: SAHIL SHAH [email protected] 6 is short, SRM is the essential central portal for new members to easily see what has happened in the past and where RFQs currently stand. RISK MANAGEMENT It’s not uncommon for Tier 1 suppliers to require that their data be protected and for you to explain how you are managing security to minimize risk. An online secured cloud-based system is ideal and a far cry from spreadsheets evenly distributed everywhere! If your suppliers have not asked you about this, expected to be asked soon, as risk management is an extremely hot topic. REAL-TIME REPORTING There are a multitude of problems associated with storing important data on spreadsheets, and on individual hard drives. One of the biggest challenges it presents is the inability to measure results. All manufacturing companies, for years, have adopted ERP systems to manage their production and CRM systems to manage sales and marketing initiatives. SRM is a way to manage your procurement initiatives in a quantifiable fashion adequately. With SRM, an owner can easily request reports detailing RFQs, awarded projects, parts costs and deliveries, and new global sources. Finally, a system that not only helps the purchasing and sourcing department but is also one that can be measured. BOTTOM LINE SAVINGS While I’ve discussed better communication, real-time reporting, reducing risks, and labor savings, there are many other measurable positive results from SRM. Reducing part costs by thoroughly conducting supplier searches is probably the one area most purchasing professionals report. They also mention minimizing pricing volatility because they have already sourced local and alternative sources. With the increased efficiency, they speak to reducing their purchasing staff as the SRM does so much of the heavy lifting. They also talk about SRM as a continuous improvement of operations. Today’s purchasing managers are under tremendous pressure to source more experienced local suppliers that can provide timely parts while reducing part costs. What has often been perceived as a ‘no-win’ situation turns into a ‘win-win’ environment for them and their qualified suppliers because of SRM. SUCCESSFUL SRM IMPLEMENTATION Using SRM, a sourcing team will likely develop better local and global sources for team members in other parts of the company. The engineering, production, and management team will likely have use for this same information, to be used in many different ways. A pump or valve you are sourcing for a particular application might have an application to a different customer. Having this data, with drawings, specifications, and pricing, would be helpful to the engineering staff that is looking to outsource this system. SRM can be integrated into their system to enhance their ability to develop systems. Because SRM has uses across a manufacturing facility, it can be integrated into an ERP for plant-wide communication and collaboration. Lean manufacturing principles teach us to identify waste with a manufacturing system to maximize productivity. Searching for information stored in various systems is an easily identifiable waste of time. Eliminating that waste with an SRM system that adds value is the true definition of being Lean. Using SRM will do more than track RFQs across all teams. It has been proven to source better suppliers to meet JIT demands at lower costs. The lower costs of SRM systems are also reducing the need to add purchasing staff. The easiest way to reduce part costs and increase on-time part deliveries on time is with SRM.
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