Supplier management has grown leaps and bounds in business circles in modern times. With global communications strengthening, and technology and transportation developing to greater levels by the day, new markets have opened up for businesses and enterprises, but with this has come a new set of challenges. While goods and materials used can be sourced from various avenues with stereotypical limitations based on geography and the cost advantage associated with this falling by the way side, the problem now has become one of picking the right associations.
It is not as easy to decide which supplier brings the most to the table and which one is not providing as much value. However, the supply management industry is evolving to meet these new challenges and scale these new horizons. Like most other things in society today, technology, in the guise of comprehensive supplier management software is what is driving this industry forward. Here are the top seven trends in this industry that are propelled by supplier management software.
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Seven supplier management trends driving the industry
1. Data management – The amount of supply and supply related data is enormous. You not only need it for legal reasons and to maintain records for posterity, but also to provide analysis pertaining to supplier performance. You do not need to file hard-copies of all this data in binders any longer, because the software now does it all digitally.
2. Evaluation of performance – How well are your suppliers doing? You don’t need to sit with a stack of invoices, a calendar and a calculator, cross references order forms to figure out whether they are delivering what they promise, when they promise these days, the software does it for you. To illustrate, here is an example from SMART by GEP in the section that talks about the software’s capabilities, this is listed as one of many – “Assess performance against qualitative and quantitative benchmarks; monitor buyer satisfaction in real time.” The last bit is crucial, ‘in real time.’ This means you do not have to do any of the hard grunt yourself, and the software keeps the numbers updated as soon as transactions occur and supplies are received.
3. Contract management – Another developing facet of supplier management is contract management. It is the digitization of all supplier information including the length of the contract, the financials involved and all other details. This includes all the legal information required to ensure that both parties are maintaining regulatory compliance so that any inquiries or legal proceedings can be dealt with as soon as they occur.
4. Supplier information – Today, a company’s identity stretches beyond its registered office and a single point of contact. This is important because offices shift and individuals do not remain with companies forever. This is why supplier management software today store and manage not just contact information but also social media profiles, website URLs and more.
5. Supplier relationship management – One of the oldest facets of supplier management is relationship management. The level of tracking and analytics on hand can easily help you identify which suppliers are under performing, but what next. If you drop suppliers every time they miss a deadline or do not match an order exactly, your options will become extremely limited, and your reputation will plummet too. Now there are software-based functionalities in place that help you with things like governance structure, engagement models, and even joint activities among other things.
6. Surveys and questionnaires – The most efficient way of gleaning information about suppliers is through surveys and questionnaires, and this approach can be used to help evaluate supplier performance. Supplier management software are capable of publishing the aforementioned surveys, collate all the responses and even store them for analysis.
7. Market intelligence – Having data on just the suppliers you deal with is not enough. Supplier networks need to be expanded from time-to-time based on changes in demand and market forces. The software allows you to pick suppliers from your database based on specific keywords, criteria and services on offer.