What is 'Supplier Relationships Management' (SRM)?

Supplier Relationship Management (SRM) is a strategic approach focused on developing and managing relationships with suppliers to improve the overall effectiveness and efficiency of supply chain operations. This involves creating structured processes to control and streamline interactions with vendors, ensuring that the organization can collaborate effectively to achieve mutual benefits.

By establishing SRM practices, organizations can better manage supplier performance, negotiate contracts, resolve issues in a timely manner, and foster innovation through collaboration. This strategic focus enables organizations to align their supply chain goals with their suppliers, ensuring that both parties work towards shared objectives and improved outcomes.

The other options, while related to business processes, do not capture the essence of SRM. Enhancing customer service focuses on client interactions rather than supplier relationships. Tracking inventory levels pertains to inventory management rather than the management of supplier relationships. Optimizing shipping routes is primarily concerned with logistics, which is a different aspect of supply chain management. Therefore, the option that accurately defines SRM is the one that emphasizes managing and controlling interactions with suppliers.