What is the difference between transactional and relational SRM?

The distinction between transactional and relational Supplier Relationship Management (SRM) lies primarily in their focus and approach to managing supplier interactions. Transactional SRM is centered around specific, short-term transactions and operational efficiencies, where the primary goal is often to minimize costs related to procurement and purchasing. This approach treats suppliers more like vendors in a competitive marketplace, emphasizing negotiation and cost-saving measures.

In contrast, relational SRM emphasizes building long-term, mutually beneficial partnerships with suppliers. This approach recognizes the value of collaboration and trust, aiming for aligned goals that can benefit both the organization and its suppliers over time. Through relational SRM, organizations invest effort into fostering relationships that facilitate innovation, quality improvements, and joint problem-solving, which are essential for sustained competitive advantage.

Given this context, the choice highlighting the focus on cost minimization for transactional SRM and the emphasis on long-term partnerships for relational SRM accurately captures the fundamental differences between the two approaches.