From the course: Supply Chain and Operations Management Tips

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Learn about supplier relationship management (SRM)

Learn about supplier relationship management (SRM)

From the course: Supply Chain and Operations Management Tips

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Learn about supplier relationship management (SRM)

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- Every business depends on their suppliers. Making sure you can get the products and services you need, on time, and for the right price is a critical part of managing a supply chain. In this video, we'll talk about supplier relationship management. And I'll show you how segmentation can help you mange supplier relationships, more effectively. Any time you separate your suppliers into groups that have similar characteristics, it's called segmentation. There are lots of ways to segment suppliers. But for this video, we'll analyze two characteristics. The amount of money you spend with the supplier and the switching cost to change suppliers. The amount of money you spend is, generally, pretty easy to find. But switching cost might be more subjective. Because it has to account for things like whether you have a big investment in shared technology and processes. Now, let's use these two characteristics to place suppliers into four segments. Commodity, standard, strategic, and key. With…

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