If you work for a large company, you most likely have tens of thousands of suppliers, and any one of them can pose a risk to your organization.
What your suppliers do affects you, for better or worse. You need to be able to monitor, manage and collaborate with your entire supply base more effectively than ever before. Technology-enabled performance management of suppliers can help:
- Improve collaboration internally and externally.
- Lower annual management costs per supplier.
- Respond to supply incidents better.
- Onboard suppliers faster.
- Execute sourcing more efficiently.
A relatively small portion of large organizations (approximately 22%) have a technology-enabled program for supplier management. However, recent advances in cloud technology have made effective supplier management much more available than it once was. Just as with any technology, HOW you use it matters just as much as WHETHER you use it at all. To that end, here are five ways Supply Base Management (SBM) can help your company become more efficient:
- Communicate once, reach many. The key challenge in effective supplier management at a large organization resides not so much in how you deal with a small number of strategic suppliers. Instead, it is about how to best communicate and collaborate with your larger number of non-strategic suppliers. Critical to this is having an automated system where you can address communications to specific segments of your supply base (e.g. a particular category, those with expiring certificates, etc.) without having to create individual emails. Look for a system that will allow you to target your communications quickly and easily to exactly the right group.
- Keep all your information in one place. Perhaps nowhere in supply chain and procurement is it more critical to have easy, centralized access to information. For example, when you have a supply chain incident (think food safety or recall) you need to be able to respond quickly and thoroughly without wasting time on administrative tasks. With segmentations ranging from line-of-business to geography to category, your information will likely be spread across many stakeholders, offices and individual computers. It is imperative that you establish an easy way to aggregate and centralize the information without creating the dreaded "shared-drive-from-hell". To do this, look for two things. First, look for a system that easily compiles ALL your suppliers in one place rather than dispersed across the organization. Second, search for a platform that is easy enough for all your stakeholders that they will actually use it.
- Let suppliers manage their own information. If you speak with buyers, one of their key hurdles was the ongoing upkeep of supplier information. Make sure the platform you choose allows suppliers to update their own information in a system where it is easy for them to do so. Set alerts and reminders for suppliers whose certifications are expiring so that they are the ones to provide new copies rather than you having to chase them down.
- Integrate your sourcing and contract efforts. Suppliers will be more likely to actively participate in your supplier management program if they know that it is integrated with your sourcing and contract management efforts. Set expectations during the sourcing process, and provide potential suppliers with an easy way to register on your platform with much of the information you would typically request in an RFI. If suppliers know that you will most likely source again from partners actively engaged in your platform, they will be more likely to participate.
- Get the information right, and keep it right. Nothing defeats "easy" like errors and rework. On the buy side, make sure you have an automated workflow that allows your buying team and key stakeholders to approve changes on elements of the supplier-provided information. Above all, do this through an intuitive dashboard that allows the buyer and/or category manager to quickly see where approvals stand. For sellers, provide them with their own platform where they can keep track of all their contracts and eSourcing events, update their profiles, attach files and certificates, receive system reminders, send and receive messages.
By using these tactics, you will be able to improve both the efficiency and effectiveness of your supplier management efforts, all while making it easier for everyone involved. Be sure to use all the supplier management ROI resources you can when convincing decision makers.
For more information on these approaches or to learn more about how Scanmarket can help you achieve your business objectives, please visit us at scanmarket.com