How to implement an optimized SRM: the 4-step method

In a landscape where information systems are fragmented, data is scattered across multiple ERPs, and processes are poorly harmonized, optimizing supplier management becomes a major transformation lever.

Here’s a hands-on method, broken down into four key steps, to build a robust and scalable SRM tailored to your organization.

1. Segment your supplier base methodically

Segmentation is the first building block. Without fine-tuned segmentation, it’s impossible to apply differentiated management or prioritize your efforts. Several dimensions can be combined:

• Spend volume – Volume isn’t always a synonym for criticality, but it’s a strong indicator of where attention is needed.
• Risk – Financial, geopolitical, reputational, ESG, dependency, cybersecurity…
• Innovation potential – R&D capabilities, agility, co-development.
• Dependency level – Is your company dependent on the supplier, or vice versa?
• Group coverage – A supplier active across several business units or countries is a good candidate for cross-functional management.

Useful tools: the Kraljic matrix, weighted supplier scoring, or analytics platforms like Sievo that integrate external data (Ecovadis, RiskMethods, etc.).

2. Define a differentiated supplier management model

Not all suppliers should be managed the same way. Each segment deserves its own governance model:

• Strategic suppliers – Require full SRM management: steering committees, KPI monitoring, improvement plans, innovation workshops, and business continuity plans. Senior stakeholders on both sides should be appointed.
• Opportunistic suppliers – For ad hoc or RFP-based suppliers, light-touch management is sufficient: post-project evaluation, occasional quality tracking.
• To develop/monitor – These suppliers have potential but need guidance. Concrete actions are planned to improve performance or compliance.
• To disengage – High-risk or underperforming suppliers are placed on an exit path with close follow-up.

SRM becomes a tool for strategic supplier portfolio management, aligned with procurement performance objectives.

3. Enable seamless collaboration

Effective SRM relies not just on clear processes, but also on the right tools. The goal: smooth communication, structured data, and enhanced responsiveness.

• Supplier portal – A one-stop shop where suppliers can view orders, submit invoices, track payments, share documents, respond to RFPs, etc.
• ERP/API integration – The SRM platform must consolidate data from various systems (SAP, Oracle, Sage...) with bidirectional synchronization.
• 360° supplier view – Performance metrics, non-conformities, disputes, legal and financial data, innovation projects... All centralized to enable real-time management.
• Collaborative workflows – Contract management, KPI tracking, approvals, and disputes become shared processes across Procurement, Finance, Quality, and Suppliers.

4. Manage supplier relationships over time

SRM is not a one-off project—it’s a living framework. Ongoing governance is essential to maintain value creation.

• Shared KPIs – Indicators must be defined jointly, communicated clearly, and regularly reviewed. Examples: OTD, dispute rate, documentation compliance, innovation delivery, mutual satisfaction.
• Scheduled business reviews – These sessions align both sides on performance, challenges, and joint initiatives. Frequency depends on supplier criticality.
• Mutual feedback – Annual satisfaction surveys for both clients and suppliers help identify improvement areas.
• Improvement plans – When needed, formalize mutual commitments, milestones, and follow-up.

Leverage orchestration platforms and AI to scale SRM

To make this model work at scale, you need a modern orchestration platform. It centralizes interactions with suppliers, structures data around a shared model, and automates key processes: sourcing, contracting, collaboration, evaluation.

Native integration with ERPs, treasury tools, compliance, or ESG platforms via API allows seamless, automated data synchronization across your ecosystem. No more silos, no more rekeying.

AI plays a vital role:

• Automatically detect early risk signals
• Categorize documents and suppliers
• Generate targeted action plans
• Recommend improvements
• Guide users through decisions and validations with smart copilots

No-code workflow builders make it easy to configure approval paths and collaborative processes adapted to each supplier type.

With such a platform, SRM becomes not just more efficient—it becomes scalable, intelligent, and deeply integrated into your procurement, finance, and compliance ecosystems.

Conclusion

Implementing an optimized SRM is about more than deploying a tool. It means building a culture of collaboration, supported by strong governance, reliable data, and interconnected digital systems.

By structuring and automating supplier management, procurement teams can finally focus on what truly creates value: anticipation, strategy, and collaboration.

What’s the outcome? Better risk control, more agility, improved procurement performance, and the ability to build lasting supplier relationships that fuel innovation and competitiveness.

Want to see how this works in practice?

Flowie helps companies implement next-generation SRM that’s connected, automated, and result-oriented.

📅 Book a personalized demo and discover how to structure, manage, and scale your supplier relationships across your entire organization.