Problem: Supplier Relationship Management (SRM) is a key role for Purchasing, as we have learned with organizations such as Amazon, Uti-Dow Corning, and the Air Canada experience highlighted for us, the Purchasing financial savings and benefits will be lost within 18 months unless the supplier relationship is fully managed. To this end in this part, we learned the importance of KPI's (Key Performance Indicators), and how they are to be mutually agreed with measures provided monthly to your attention from the supplier.
Scenario: Assume that your company "Local Community Hardware" (Parts Division), has just set up a contract with "Rapid Courier" for pick up and deliveries at your company and the volumes are in the range of 30-40 daily (in and out basis) Monday to Friday 9:00 am to 5:00 pm, Special rush shipments after hours and weekends are available (part of the contract) with prior approval (name, date, and time) & full supporting documentation required. As agreed in the contract within 3 hours of after-hours & weekends special request to "Rapid Courier" the delivery will have taken place.