January 27, 2015

Why Supplier Relationship Management is important to Brand Management success

Our contacts within corporations go far beyond brand management teams. As a provider of brand implementation services and branded materials (exterior signs, interior signs, fleet vehicle graphics, and so on), we often simultaneously interface with brand management, facilities management, fleet management, operations management and the procurement department to ensure their supply chain management efforts go smoothly for rebranding projects. This gives us a unique opportunity to see different approaches to managing suppliers and evaluate which approaches lead to the best results.

From a brand management perspective, companies that have embraced Supplier Relationship Management (SRM) seem to move quicker and be more successful. Let me explain. Companies that have implemented SRM see their supply chain in a new light. The old paradigm was to manage the supply chain solely to minimize costs. The SRM approach is about maximizing value. Cost reduction is often a byproduct of maximizing value, because suppliers are able to use their expertise to come up with cost-effective solutions during brand management projects.

I just read a research report from PwC about Supplier Relationship Management that surveyed 500 sourcing and procurement practitioners worldwide. According to the report, the number one objective of SRM among the respondents was: “Leveraging supplier capabilities.” Their main goal was: “Gaining access to unique knowledge, resources, capabilities, talent, and ideas…” To me, that matches the best brand management practices we see. Combining the expertise of company employees and supplier employees, better overall solutions can be developed. And collaboration on one project leads to higher levels of problem solving on future projects.

Market opportunities come and go quickly. So do the opportunities to execute great brand management. The best companies leverage the capabilities of their brand management supply chain. Whether it’s a relationship with a branding firm, a digital agency, an implementation firm, or suppliers of branding materials, smart brand management teams seek out and reward partners who bring more than the minimum to the table. They know that the partnership approach leads to greater buy-in, pride and sense of ownership from their supply chain partners. Just like employees, suppliers act as brand ambassadors for the company. A supplier who produces a poor quality sign or badly designed logo can hurt the company’s reputation, because customers judge the company by the end result without thinking about whether an employee or a supplier did the work.

Companies looking for a competitive advantage know the SRM approach is the way to go. When we see companies issue multiple RFPs and do annual agency reviews, it’s a red flag the company hasn’t adopted the SRM approach. If the brand management team allows the procurement department to focus solely on cost reduction, the entire company suffers.