Supplier management: all you need to know
Supplier management is one of the most important elements in ensuring a company’s performance. Whether they are service providers or distributors of goods, they need to be well managed. What’s more, the perpetual evolution of the market demands constant attention to suppliers. Establishing good supplier relations is essential to running a business. Suppliers are stakeholders in your development and should be seen as partners. To manage your supplier database, it is now more practical to use digital tools that can centralise supplier management. There are other tricks you can use to perfect your supplier relations and achieve successful development. This article lists everything you need to know about managing your suppliers.
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Define supplier selection criteria
First of all, whatever the activities carried out by a company, it must always have a reliable supplier repository. The supply chain depends directly on it. In terms of risk prevention, it is preferable to have different suppliers available to ensure a flow of goods or to protect against financial risks. That’s why it’s vital to surround yourself with the right suppliers you can rely on.
It also means you have better control over order management. Every company needs to establish relevant criteria for selecting its strategic suppliers. In 2023, these will mainly be :
- The supplier’s strategic position within the company.
- The track record of each supplier in its sector of activity.
- Product and service references to guarantee quality.
- Forecast profitability in relation to the purchase price.
- Payment terms and conditions.
Some criteria may change and fluctuate over time. The most important thing is to understand the strategic risks for your company and, in return, to assess the position occupied by these suppliers. You should not hesitate to impose strict criteria that reflect your corporate philosophy. In fact, they guarantee the basis for a good relationship of trust with suppliers, with the aim of contributing to the company’s growth.
Centralise supplier management
The dematerialisation of everything to do with supplier management is becoming increasingly popular. It makes it easier to centralise supplier data, and is an advantage because it contributes directly to managing company performance. Thanks to the development of management solutions, a growing number of small and medium-sized enterprises (SMEs) are moving towards centralised supplier management.
This increasingly common practice offers a number of advantages. Firstly, it provides real-time visibility of management processes, making it easier to control supplier risks. What’s more, centralising the management of supplier relationships boosts team productivity. Having rapid access to supplier information is a key issue in today’s world.
Finally, supplier auditing is much easier to implement with a management tool that carries out automatic operations and records movements. It also reduces the time and costs involved in placing orders and managing supplier invoices. With purchasing management software, orders are centralised. This makes it easier to regularly check the company’s situation in real time and keep purchasing turnover under control.
Purchasing management software
Purchasing management can also require a lot of means and resources. It is an administrative function with time-consuming but automatable tasks at its heart. Productivity is a key issue for many companies these days. For example, an optimised and digitised purchasing process enables flows to be measured and operational risks to be limited.
Using purchasing management software is one of the trends for 2023. What could be better than a management application connected to an ERP system to carry out necessary tasks remotely, where the situation slows down the possibilities of physical execution? The relationship with suppliers can always be kept intact despite the crises experienced by the company. Thanks to a purchasing management tool, it is also easier to control expenditure by validating purchases within each department of the company. The same applies to delivery times. Good purchasing software can measure late deliveries and provide an overall report over a period to evaluate suppliers. There are no risk assessment tools without the necessary data reprocessing. However, some purchasing software packages have evaluation tools integrated into their management modules. This makes it possible to check the regularity of the purchasing process and the control of the supply chain in real time.
Free software is available to help small and medium-sized businesses try their hand at supplier management. For these companies, managing the supply chain is not always easy because so many suppliers and partners interact. And it is through theseautomation and data centralisation tools that business continuity is ensured. Surrounding yourself with an effective management solution, ideally connected to your ERP system, makes it easier to manage your business. And your inbox will be relieved of a certain flow that’s hard to keep up with.
Optimal invoice processing
Invoice processing has also been a key issue in recent years. Meeting payment deadlines is not always easy. Not from a cash flow point of view, but rather because processing is cumbersome. When information is not centralised, and it takes a long time to reconcile the purchase order with the invoice, supplier payment times are automatically extended.
The same applies to risk management. Supplier risks first of all, because this type of phenomenon can create a cascade reaction of late payments. This is why today’s public procurement authorities, who are the main principals, must pay part of the sum in advance of delivery. There are also contractual risks. If the supplier relationship is governed by a contract and the terms of payment are not respected, the contract may be called into question. Finally, there are financial risks. In addition to the systemic failure explained above, the law has strengthened its legal arsenal and penalises late payment. In addition to a fine, therefore, there is a risk of damage to your image and your future relations, since the sanctions imposed by the DGCCRF are publicly visible.
Today, thanks to theaccessibility of supplier management tools, it is much easier to control these processes. Thanks to dematerialisation, invoices are issued in electronic form and no longer represent as much work to be carried out within a tight timeframe. Sending and receiving invoices can be time-consuming and costly, but processing them is no longer as complicated with supplier invoice management software. To be able to carry out automatic operations with invoices, it is essential to work with suppliers who adopt the same management principle. This way, processing will be truly optimised and there will be no delays or unpaid invoices to worry about.
For companies that still process invoices manually, a great deal of time, energy and money is involved. Dematerialisation offers considerable savings.
At a time when automation and digitisation techniques are becoming increasingly advanced, supplier management needs to be optimised and geared towards this goal. That’s why Weproc offers you the opportunity to work with innovative supplier management tools. Our aim is to maintain the best possible relationship with suppliers. Then your company will be moving in the right direction.
Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!
Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.