VRM Thomas R. Cutler discovers vendor relationship management (VRM), a relatively new supply chain tool that pays off for all parties Businessexcellence September 07 12 is now!
Supply chain September 07 Businessexcellence 13 VRM, or vendor relationship management, is the reciprocal of CRM (Customer Relationship Management). VRM provides industrial, distribution, and a wide range of enterprises with the technology and tools for efficient vendor interactions that benefit both parties. “Until recently, CRM systems took on the full burden of relating with customers,” explained Larry Caretsky, president of Commence Corporation. “VRM technology provides complex enterprises with the means to take some of the CRM functionality and to help make markets work for both the vendors and customers. The goal of VRM is to improve the relationship between demand and supply by providing new and better ways to relate to each other.” In a true business processing model, VRM improves markets by providing mechanisms that equip full-service organizations to be independent leaders rather than lagging participants in relationships with vendors and other parties on the supply side of the marketplace. VRM works because vendors have reason to value it, and industrial and distribution organizations have reasons to invest the necessary time, effort, and attention to implementation. ProjectVRM is headquartered at the Berkman Center for Internet and Society at Harvard University and headed by Doc Searls, a fellow with the Center. The group has identified certain principles and encouraged input and participation in the development of the VRM concept. The principles of VRM identified by ProjectVRM are: 1. User-centricity 2. Reduce, reuse, recycle (don’t reinvent the wheel) 3. Reciprocity & everybody wins 4. Leverage network effects 5. Relationships are more than transactions 6. Solve real-world problems