What is the relationship between SRM and procurement?

The relationship between Supplier Relationship Management (SRM) and procurement is rooted in the distinct yet complementary roles each plays in the supply chain. SRM emphasizes building and nurturing productive relationships with suppliers to enhance collaboration, drive innovation, and ensure quality service and product delivery. It is about developing strategic partnerships and managing the supplier lifecycle effectively.

On the other hand, procurement primarily focuses on the purchasing functions, which include sourcing and acquiring goods and services. While procurement can involve negotiating prices and contracts, its main aim is to fulfill the organization’s purchasing needs. SRM complements procurement by ensuring that supplier relationships are managed effectively, which can lead to improved procurement outcomes.

This understanding of the distinct functions highlights why managing supplier relationships is a focus of SRM, while procurement is primarily about purchasing. The synergies between the two can lead to more efficient and strategic sourcing practices, ultimately contributing to an organization's overall success.