Why supplier relationship management is essential for your business

What is supplier relationship management (SRM)? 

Supplier Relationship Management (SRM) is the process of managing and optimising relationships with suppliers to improve performance, reduce risk, and create long-term value.

At its core, SRM is about moving beyond transactions to build mutually beneficial relationships that support your organisation’s goals, whether that’s reducing costs, ensuring ethical sourcing, or driving innovation and sustainability across the supply chain.

Why SRM matters in housing and construction

Housing providers and construction leaders rely on a vast network of strategic suppliers, encompassing materials, maintenance, IT, and professional services. Without strong supplier relationships, projects can face cost overruns, quality issues, and supply chain disruptions.

An effective SRM process helps housing associations and developers:

• Strengthen supplier performance and accountability
• Maintain compliance with ESG and modern-slavery obligations
• Improve transparency through real-time data visibility
• Reduce risks tied to delays or supplier insolvency
• Build collaborative relationships that drive shared innovation.

In a sector under pressure to deliver sustainable, affordable homes, effective supplier relationship management is essential for efficiency and resilience.

The SRM lifecycle: how strong supplier relationships evolve

SRM isn’t a one-off task; it’s a continuous cycle that helps you get the best from every partnership.

• Onboard and qualify suppliers: Gather documentation (insurance, certifications, ESG data) and assess fit for purpose.
• Segment suppliers: Group by criticality, spend, and strategic importance. Use frameworks like the Kraljic Matrix to identify key suppliers.
• Define KPIs and expectations: Establish key performance indicators (KPIs) such as on-time delivery, product quality, compliance rates, and sustainability metrics.
• Monitor performance: Track progress through regular performance reviews and real-time visibility tools.
• Collaborate for improvement: Engage suppliers to solve challenges, share feedback, and identify areas for innovation.
• Continuously improve: Use data and insights to refine strategies, reduce total cost, and enhance shared value.

Key benefits of effective SRM

A well-structured supplier relationship management process delivers measurable outcomes:

• Transparency: Clear oversight of supplier data, policies, and risk indicators.
• Compliance: Easier alignment with Fair Work, ESG, and procurement standards.
• Efficiency: Reduced manual admin and faster supplier onboarding.
• Innovation: Closer partnerships drive new solutions and faster time-to-market.
• Sustainability: Real-time visibility into social and environmental impact.

When organisations manage suppliers strategically, both parties benefit—the buyer gains stability and value, while suppliers enjoy clarity, trust, and longer-term collaboration.

How technology enables better supplier relationships 

An effective SRM system gives procurement and housing leaders the tools to:

• Track supplier performance metrics over time
• Benchmark suppliers against quality, cost, and ESG criteria
• Identify and address potential risks early
• Facilitate open communication and document sharing
• Generate actionable insights to support decision-making.

These capabilities turn supplier management from a time-consuming process into a strategic advantage.

Example: A housing provider utilises SRM software to track supplier emissions data and identify high-impact suppliers for carbon reduction programs. The insights help them meet sustainability goals while improving cost efficiency.

Best practices for implementing SRM

Getting started with SRM doesn’t have to be complex. Focus on these key steps:

1. Set clear objectives: Define what success looks like (cost control, compliance, innovation).
2. Gain executive sponsorship: Ensure leadership support and resource commitment.
3. Segment suppliers: Prioritise strategic suppliers who have the biggest impact.
4. Define measurable KPIs, such as on-time delivery, quality defects, or reduction in carbon footprint.
5. Implement SRM technology: Centralise supplier data and enable performance tracking.
6. Collaborate and communicate: Build trust through regular feedback and shared objectives.
7. Review and improve: Schedule performance reviews and update KPIs regularly.

These steps build a foundation for strong, transparent, and continuously improving supplier relationships.

SRM in action: from transactional to strategic partnerships

Traditional supplier management focuses on contracts and compliance. SRM shifts the focus to collaboration and shared value.

When suppliers are treated as partners rather than vendors:

• Conversations move from price to performance.
• Risks are identified earlier and resolved faster.
• Joint innovation becomes part of the relationship.

For housing providers, this could mean working with a materials supplier to trial low-carbon alternatives or co-developing digital reporting tools to meet ESG requirements.

Data-driven insights for better decisions

Data is the foundation of effective SRM. Real-time dashboards can highlight:

• Which suppliers consistently meet KPIs
• Which ones pose compliance or delivery risks
• Where improvement opportunities lie.

With these insights, leaders can make evidence-based decisions. Choosing the right suppliers, developing targeted improvement plans, and ensuring resources go to partnerships that genuinely add value.

The role of SRM software

An SRM system enables organisations to manage the full lifecycle, from onboarding to performance reviews, in one platform. It brings together supplier data, documentation, and communication to streamline decision-making and compliance.

Example: An SRM platform can flag when a supplier’s certification expires or when ESG performance slips, prompting proactive action before a contract breach occurs.

Supplier Management from OneAdvanced is one example of an SRM solution designed for housing and public-sector organisations. It centralises supplier data, supports ESG tracking, and helps leaders make informed, confident decisions across complex supply chains.

FAQs

How does SRM differ from supplier management?

Supplier management focuses on processes and compliance; SRM takes a broader, strategic view — fostering collaboration, innovation, and shared value creation.

What are the first steps for housing providers?

Start by mapping your supplier base, segmenting suppliers by strategic importance, and defining measurable KPIs. Then implement an SRM tool to support monitoring and communication.

What KPIs should I track?

Common SRM metrics include:

• On-time delivery rates
• Quality and defect percentages
• ESG performance and carbon footprint
• Contract compliance
• Cost-saving initiatives achieved.

Stronger partnerships, stronger performance

Effective supplier relationship management transforms supply chains from reactive to resilient. By building strong, data-driven, and collaborative relationships, housing and construction leaders can reduce risk, drive innovation, and meet sustainability targets.

When organisations invest in SRM — supported by the right technology — they gain more than compliance. They gain trust, transparency, and competitive advantage across every supplier relationship.