Supplier Management: How to Capture Information and Take Sourcing to the Next Level
- All Industries
- Supplier Management
Managing supplier lists when sourcing goods and services is a challenge that many companies face. From collecting and managing basic contact information, quotes, contracts, product information and geographies served, to including additional information such as performance data that is critical in making informed decisions. There is a lot of supplier information to collect and manage, and too often companies that don’t utilize a supplier management tool are relying on Excel spreadsheets, Outlook or even paper copies to try to manage this information.Not only are there obvious risks to this type of supplier management, such as the simple fact that contact information can easily be lost, there is also a lack of consistency within an organization and cross-departmental confusion when individuals don’t know where the information is housed.
Unfortunately, it is a problem too many are facing. According toArdent Partners’ The State of Strategic Sourcing 2015 Report, “Automated supplier information and performance tools remain under-utilized. Just 28% of all sourcing teams today automate supplier performance management. Automated supplier information management fared even worse among all respondents, with just 19% of all sourcing teams automating this facet of the process.“
Supplier management tools can save time, money and help reduce risk. Once you make the decision to use a supplier database, there are different ways to manage your data:
- Proactively by entering supplier information prior to a sourcing event. Collecting information for those you work with on a regular basis, but also those that may reach out to you and want work with you, or those recommended to you prior.This provides a richer pool of suppliers to choose from prior to a sourcing event.
- Alternatively, companies can build a database during a sourcing event. Supplier databases such asTotal Supplier Manager allow you conduct extensive vetting exercises and collect vendor onboarding information all in conjunction with sourcing activities.
Once you have established the basics, you are set up for the opportunity to improve your relationship with suppliers. The performance manager side of the supplier manager tool provides you with the data and information needed to increase supplier performance, save money, and open the door to conversation starters to potentially improve not only your business, but your suppliers’ as well. By collecting data on how you are interacting and purchasing you can negotiate discounts, finalize contracts with better terms for yourself and your supplier, commit to a greater spend and even discuss new lines of purchases based on their production capabilities.
Supplier management tools not only benefit your organization, they can lead to more collaborative conversations with suppliers to help take sourcing to the next level.
For more ways to optimize your sourcing processes, watch the Herding Cats is not a Strategy: Move Beyond Tactics to Align for Success webinar, which discusses best practices and coming trends for putting practical strategies in place.