Behind every good supplier recognition program is a strong supplier relationship management (SRM) program.
Purchasing operations that formally recognize suppliers understand that it's nearly impossible to manage a supply base that can number into the hundreds or thousands of companies. So they segment the supply base and actively manage a much smaller number. Of this number, they select a few preferred suppliers to participate in recognition programs that develop suppliers and reward performance in cost, delivery, quality, service and other critical areas.
The rewards for suppliers and purchasing are great. The effort pays off in improved internal operations, new opportunities for additional business and other ways.
Source: Purchasing