What are the potential risks associated with poor supplier relationship management (SRM)?

The choice identifying decreased supplier performance accurately captures a significant risk linked to poor supplier relationship management (SRM). When organizations fail to foster strong relationships with their suppliers, they may encounter a range of negative consequences, particularly in terms of performance. Poor communication, lack of collaboration, and inadequate feedback can cause suppliers to underperform, leading to delays, lower product quality, and an inability to meet contractual obligations.

Strong supplier relationships often lead to partnerships where both parties are invested in mutual success, allowing for improvements in supply chain efficiency and performance. Conversely, neglecting these relationships may result in suppliers feeling undervalued or unmotivated, directly affecting the quality and timeliness of their deliveries. As a result, organizations could face disruptions in their operations, ultimately impacting their own service delivery and customer satisfaction.

In contrast to this correct choice, the other options suggest outcomes that are typically associated with effective supplier relationship management rather than poor management. Increased efficiency, improved communication, and enhanced product quality generally stem from well-managed supplier interactions, highlighting the importance of nurturing these relationships to achieve better overall results.