The outcome of a good supplier relationship management (SRM) programme should be a continuous stream of improvement projects that result in increased value for your organisation. But this does not just happen. You need a process that delivers it effectively and efficiently. This article describes three levels of improvement that should be your aim.

As with any improvement project, you need to baseline your starting point so that you have something to measure improvements against.

The initial baseline you can use for the relationship is based on a thin slice of the EFQM model. A representative cross-section of those involved in some way with the supplier and the delivery of the product or service are sent a one page questionnaire to fill out. They do this twice; once from their own organisation’s perspective and once from the point of view of how they see the other party. Putting this together gives a simple measure of where the relationship is in terms of the enablers of good performance as well as the performance itself.

At regular intervals (typically twice a year) the exercise is revisited to measure the progress that has been made.

Having baselined the relationship, identified the areas that need to be addressed and having dug into some of the root causes, you will be in a position to identify at what level the relationship is and how it can move forward.

The most basic level is called “stabilise”. This is where the analysis of performance shows inconsistencies in delivering the product or service, either from a quality, time or cost point of view. Early improvement projects are aimed at attacking the causes of variability so that a consistent and reliable service is achieved.

The next level up, once a stable performance has been achieved, is to improve on that level of performance. This involves approaches such as Lean Design and Six Sigma.

The level after this is called the innovate phase. This is where you look at transforming the way the service or product is delivered to achieve a step change improvement in quality, cost and service.

The spirit of the SRM programme is that it involves continuous improvement. As a result, the main components of the process should be reviewed at regular intervals.

Annually, you should check that your SRM partners are still the right ones and that your joint goals are still the same. More frequently, you should check that the pipeline is still filling with potential ideas and that you still have access to the resources you need to make it all happen.