‘Your suppliers hate you!’ A daring insight from Dr Elouise Epstein at past Procuretech Founders’ Circles. But is it true?
With a growing supplier base, companies are asking them to onboard through multiple tick-box exercises.
And with countless ways, not all processes are the same, nor easy.
So how can it be managed – the right way?
What is Supplier Management?
‘The process of managing and improving interactions with third-party vendors that provide goods or services.’ Simfoni
The growth of the supply chain market is not easing up. 2022 market size reached $19.58 billion, with a projection of nearly $31 billion by 2026, feeding companies’ appetites to get their own piece of the market. As supply chains become more digitized, this means managing more suppliers in a more functional way, using the right tools to be the ‘customer of choice’ by creating a smoother supplier experience (SXM) and onboarding process whilst nurturing relationships (SRM).
HICX outlined an 8-step guide to launching a supplier-centric strategy:
- Assess the data foundation in your organisation
- Audit the current supplier experience from multiple perspectives
- Identify and close gaps efficiently
- Evaluate how information is being communicated to suppliers and how enquiries are handled when suppliers want information from you
- Identify easy initiatives or quick wins for your organisation, review the impact and continue building
- Iterate based on the metrics and feedback from stakeholders but always include suppliers in this process
- Review the technology landscape with a view to defining a roadmap towards the future state
- Measure if you are a customer-of-choice on an ongoing basis and set targets for specific outcomes
‘73% of suppliers agree that they would ‘go the extra mile’ for a customer-of-choice.
This compares to just 49% who state the same for organizations that are simply considered the most important customer.’
HICX Voice of the Supplier Survey
Why use Supplier Management tools?
IBM outlines 3 key benefits teams can expect to see when using the right tools to improve their supplier management strategy:
- Increase supply chain agility
- Achieve cost savings
- Reduce supply chain risk
And it doesn’t stop there. Recent predictions by the 2022 ProcureTech100 revealed using such tools can build better relationships and improve procurement processes. Furthermore, working together to streamline workflows can make the supplier experience worthwhile.
The future of Supplier Management
Digital is one of the key ways forward for companies. As more choose to embark on a digital transformation process, teams choose more proactive ways of achieving best practices and improving sustainability initiatives, as supplier diversity opens up. Not only can companies achieve more cost savings, but source more locally compared to importing goods from around the world along with associated carbon emissions.
- Boost supplier diversity
- Digital transformation – start your journey sooner with suppliers
- Supplier Management means creating the right experience. Relationships will follow
- Performance improvement through cost optimisation, improved quality and stronger compliance
- Access to innovation through leading suppliers
- Risks and issues can be identified and managed more effectively