Many companies today face the nearly impossible task of managing a large supplier base that has become increasingly diverse and potentially global. Traditional supply chain management and procurement practices just can’t keep up. Procurement teams are faced with too many suppliers and too few answers. The need for a centralized repository of supplier information to mitigate risk and assist in the evaluation and selection of suppliers has become paramount. This why so many companies are now looking into digital supplier management solutions.
The digital transformation of the supplier management process is long overdue. Faced with an inconsistent onboarding process, fragmented performance reporting, inaccurate risk assessment, and out-of-date information, many companies are seeking a better way to do business and manage their supply chain.
Why use a supplier management solution?
Today’s supplier management process often comes up short. It’s often a redundant, disconnected process from onboarding to engagement that creates greater risk with every decision. Fragmented supplier records and assessments make it impossible to collaborate with stakeholders and make appropriate choices regarding preferred suppliers. And when preferred suppliers aren’t used, the costs and risks tend to soar. Traditional, manual risk scoring and segmentation often misses critical signals, making timely action difficult. And because they aren’t part of a large, established network, suppliers can’t easily update their information in one place, which creates inaccurate vendor records.
A supplier management solution can solve these problems and streamline the process. All technology has a function, but the best technology has a purpose as well. The purpose of a supplier management solution, at its most basic, is about knowing your suppliers inside and out and managing them day-to-day. But it can be so much more. The right solution can help you be proactive rather than reactive. It can help you think strategically and add value to your company instead of just filling orders. The right supplier management solution can make your supply chain more reliable, more ethical, and ultimately, unstoppable.
Finding a winning solution
A successful supplier management solution often hinges as much on managing expectations and priorities as it does on the technology. Proper planning and evaluation is necessary. A poor process, plus new technology, often leads to nothing more than a poor, expensive process. This is an equation that has sunk many technology implementations. Your plan for success needs to be as good as the solution you find.
Finding a winning solution begins with making sure everyone is on the same road to same destination. Developing a plan that takes into account everyone’s expectations and priorities requires collaboration, and a clearly defined process consists of determining a starting point, defining a finish line, and finding technology that will enable you to create supplier management with a purpose through an integrated, end-to-end procurement processes.
Greater integration for better decision-making
A holistic view of supplier information, performance, and risk, along with the largest network of suppliers, can guide decisions all along the source-to-settle continuum. A winning solution works vertically, allowing you to deal with every supplier, at every tier, based on the criteria most relevant to you. Whether it’s in one category or region or many, it also works horizontally, granting you insights that allow you to make smarter choices, from your ERP backend all the way to your sourcing and procurement applications. But most of all, a winning solution connects seamlessly, eliminating holes in the process by providing all of your source-to-settle technology in one package, from one company.
Imagine using supplier management and risk insights when you need them, at key decision points in the process. Imagine being able to check supplier onboarding status, halt purchases, or switch out non-performing suppliers, renegotiate contracts based on risk and performance, and get alerted to changes in supplier risk so you can drive the right supplier relationships all with one integrated solution. A winning solution is driven by a powerful network, improving your business from end-to-end.
Keeping supplier information in sync
A unified source of truth for supplier information is the foundation of an effective supplier management solution. No matter what the task, the ability to view the most current, most accurate version of supplier information is critical. A winning supplier management solution achieves just that. With the right solution, your sourcing, procurement, and supplier management applications and backend ERP systems are connected and share the same information. So, when information is changed anywhere, it’s changed everywhere.
On the ground, this means information about supplier lifecycles, performance, and risk is the same whether someone is at a desk in Denver or in a factory in Saigon. Data needs to be entered into the system just once, and it is changed throughout. Suppliers can even update information themselves, which saves them time, saves you time, and results in more current information to make more accurate risk and performance decisions.
Every business, and every part of it, is unique. A winning-supplier management solution is designed to accommodate those differences from the beginning of the supplier lifecycle to the end. A winning solution recognizes the differences within your business, and then builds functionality with the purpose of making supplier management work your way. Intelligent flexibility is key.
When it comes to evaluating suppliers, one size does not fit all. Onboarding and qualifying suppliers, questionnaires, risk assessments, and approval processes should be customizable by category, location, and business unit. Such flexibility in a winning solution allows you to easily designate preferred suppliers based on specific needs and parameters. Sharing that information across all sourcing and procurement applications means more people will use preferred suppliers more often.
Knowledge is the key
Not all supplier information is created equal. A winning supplier management solution provides the most relevant data, from the best sources, delivered in the easiest way possible. It’s the best aggregator of content, rather than a creator of content. It includes a robust ecosystem of data and service providers to get and verify a wide range of information, focused application interfaces (APIs) that reach out to hundreds of thousands of sources for the most relevant data, and APIs targeted to different industries and issues like financial solvency, slave labor, and cybersecurity. A winning supplier solution uses artificial intelligence (AI) so that the information is easy to consume, predictive, actionable, and customizable to region, business unit, and category. The most relevant, most reliable, most accessible information is the most valuable.
Predicting the future, at least when it comes to your supply chain, is actually possible. A solution with proactive risk due diligence and automated supplier monitoring can make potential issues known before they impact your business. A winning supplier solution provides a 360-degree view of your suppliers, including risk insights that allow you to see the entire picture for all active supplier engagements. Insights tailored to your priorities, and delivered at the right times, lead to more proactive decisions.
In the end, a winning supplier solution can help bring your supply chain into the 21st century. With the right solution, you have the power to make an impact, to think more strategically, operate more proactively, and work more ethically so you can change your company… and the world.
For more insight, download How to Choose a Winning Supplier Management Solution.