Supplier Relationship Management: Top 10 Do's and Don'ts

Supplier relationship management (SRM) is the backbone of a resilient supply chain. When procurement teams manage suppliers effectively, they reduce risk, improve performance, and streamline delivery across large project environments. Whether you are modernising your vendor management system or replacing manual spreadsheets, these essential do's and don'ts will help you strengthen your SRM strategy.

The Top 5 Do's Of Supplier Relationship Management

Do Communicate Expectations Clearly

Clear, consistent communication is the foundation of strong supplier relationships. Set expectations early around delivery timelines, compliance requirements, and safety standards. Use your vendor management software to centralise supplier onboarding, store vendor information, evaluate performance, and keep both sides aligned. Transparent communication reduces confusion and helps suppliers deliver with confidence.

Do Involve Suppliers Early in Planning

Suppliers bring valuable on the ground insight into feasibility, costs, and risk. By involving key vendors during planning stages, you create space for collaborative problem solving and smarter decision making. Early engagement also strengthens trust, helping suppliers feel heard and invested.

Do Establish Formal Governance and KPIs

Governance gives structure to supplier relationship management. Build clear KPIs, contract milestones, meeting cadences, and documented responsibilities. When both parties understand what success looks like, performance becomes easier to measure and optimise.

Do Build Capability Within Your Procurement Team

Strong SRM requires skilled people who can negotiate, communicate, and manage risk. Invest in training that builds commercial acumen, soft skills, and familiarity with digitised vendor management systems. Skilled staff make faster, more informed decisions that protect project outcomes.

Do Use Technology To Centralise Supplier Information

Enterprises with thousands of suppliers cannot rely on spreadsheets. A vendor management system consolidates onboarding, insurance documents, compliance records, risk indicators, and performance insights into one place. Centralised data supports smarter decisions and reduces operational delays.

Project location (source: Transport for NSW)

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The Top 5 Don'ts Of Supplier Relationship Management

Do Not Rely On Informal Or Unstructured Communication

Unclear emails, scattered documents, or last minute updates create confusion for suppliers. Inconsistent communication often results in delayed delivery, incomplete documentation, or compliance gaps. Formalise communication channels through a central vendor management platform.

Do Not Ignore Supplier Feedback Or Expertise

Suppliers often identify risks before they escalate. Ignoring their feedback leads to avoidable issues, strained relationships, and missed opportunities for improvement. Treat supplier insights as valuable data points that support stronger project outcomes.

Do Not Treat SRM As A One Off Event

Supplier relationship management is continuous. If you only engage suppliers during onboarding or when something goes wrong, you miss essential opportunities for optimisation. Ongoing oversight reduces risk and helps maintain performance consistency.

Do Not Depend On Spreadsheets For Complex Supplier Environments

Fragmented data increases risk, slows procurement, and reduces visibility. Spreadsheets cannot keep up with large scale supplier portfolios. Vendor management software allows procurement teams to scale without sacrificing control.

Do Not Ignore Early Warning Signs Of Risk

Slow responses, incomplete documentation, or declining performance are signs of deeper issues. Proactive monitoring helps procurement teams address risks before they affect project delivery. Vendor management systems can help surface these signals before issues can become costly for your organisation.

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KEY TAKEAWAYS

Strengthening supplier relationships relies on clear processes and consistent communication. The points below give you a simple overview of what matters most:

• Supplier relationship management (SRM) is the practice of overseeing strategic suppliers throughout their lifecycle. The goal is to support strong performance, reduce risk, and maintain long-term value.
• Vendor management software helps by centralising supplier information, compliance documents, and performance data in one location. This makes it easier for procurement teams to manage supplier relationships and surface insights.
• Understanding the do's and don'ts of SRM creates more reliable workflows and helps teams avoid common issues that affect collaboration and governance.
• Industries with complex supply chains, such as construction, mining, and ports, benefit significantly from a structured SRM approach because supplier performance plays such a major role in organisational outcomes.
  
  If you want support in strengthening supplier relationships, performance and reducing risk across your supply chain, connect with Felix Software to learn how we can help.