If you’re reading this guide, you’re already aware of the need for Supplier Management, but we’ll discuss it briefly anyway.
Two main areas fall within the umbrella of supplier management to govern it properly.
The first is evaluation purposes. Essentially, an organization has to know if suppliers are performing as they're required. A supplier relationship cannot be fully functional without understanding how the relationship benefits both parties.
The second is to find areas where suppliers can improve and engage with them throughout the life cycle between the supplier and the organization.
This is why we need supplier management. Value is what underscores the relationship between the supplier and the organization. The requirements, which are a crucial underpinning to the supplier relationship, can flex and change throughout the lifecycle with that supplier.
So not only is it necessary to identify the requirements and ensure suppliers meet them initially, but it's also essential to continuously improve the relationship with your supplier to get the most from their service.
This continuous improvement involves tracking and measuring performance consistently. It also involves a great deal of communication and a feedback loop. For that to occur, a transparent, communicative, and collaborative relationship must exist so both supplier and company can find areas to improve with efficient solutions.