Best Practices in Supplier Relationship Management and Their Early Implementation in the Air Force Materiel Command

by Mary E. Chenoweth, Nancy Young Moore, Amy G. Cox, Judith D. Mele, Jerry M. Sollinger

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The U.S. Air Force is under pressure to reduce the costs of its logistics operations while simultaneously improving their performance. More than 40 percent of the total Air Force budget goes toward purchases from the private sector, so any efforts to generate significant savings must target purchases from the private sector. Since 2002, the Air Force has had a program called Supplier Relationship Management (SRM) within the Air Force Materiel Command that has the goal of reducing the cost and improving the quality and performance of purchased goods and services by carefully managing relations with suppliers to the mutual advantage of each. Commercial firms have benefited from SRM for some time, but the scope and pace of the savings generated by the Air Force SRM program have been less than anticipated by senior leaders. This report reviews the literature on best practices in SRM; assesses how the Air Force has implemented SRM, including an analysis of annual spending with key SRM contractors as well as interviews with Air Force personnel; and recommends actions, based on lessons from private-sector firms, that the Air Force could take to improve its implementation of SRM.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Current Best Practices in Supplier Relationship Management

  • Chapter Three

    Current Supplier Relationship Management Practices at Air Force Materiel Command

  • Chapter Four

    Challenges and Hindrances to Implementing Supplier Relationship Management in Air Force Materiel Command

  • Chapter Five

    Conclusions and Recommendations

  • Appendix A

    Four Stages of Krause and Handfield Methodology

  • Appendix B

    Supplier Relationship Management Spend Analyses: Methodology and Additional Results

  • Appendix C

    Supplier Relationship Management Interviews

  • Appendix D

    Supplier Relationship Management Government and Private-Sector Company Interview Protocols

Research conducted by

The research reported here was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE.

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