Using a supplier management software in your company

Over the past two decades, sales and marketing teams have reaped the many benefits of customer relationship management (CRM) solutions. But in the meantime, procurement and sourcing teams have been left to their own devices. They had to go their own way, using methods they had developed themselves. These made-from-scratch solutions can certainly help, but the future of excellent procurement management clearly depends on excellent supplier management.

Supplier relationship management (SRM) software offers the possibility of a smarter, faster and more secure relationship between supplier and customer. This means that SRM software will have a positive impact on your entire procurement organisation. In this article, find out how using supplier management software can be an important change for your business and support good supplier panel management.

Preservation of brand image

Supplier management software can help you preserve the value of your brand. In fact, many supplier management software solutions offer risk management. This allows you to limit any potential damage to your brand. To do this, third-party suppliers are used as a source to judiciously supplement market information. This information enables compliance and transparency requirements for supply chains to be met. This is particularly useful because supplier non-compliance can lead to a loss of brand value. This loss of value can in turn lead to a significant loss of shareholder value and equity. Using supplier management software spares you these situations and preserves the value and image of your brand. By setting up a supplier panel, you sort through your suppliers. Only those who correspond to your values and meet all your needs will remain. It is important to work with suppliers who share the same vision as your company.

Strengthening your negotiating power

Suppliers should be your friends, not your employees. Your role as a procurement professional will always involve a strong ability to negotiate with your suppliers to achieve cost savings and also reduce supplier risk. Introducing supplier relationship management software can give you greater control over your relationships with suppliers, enabling you to maintain good relationships. You’ll be able to get a complete overview of how the supplier works, including the services agreed in the contract. In this way, you can strengthen your ability to negotiate responsibly and confidently. These negotiations will therefore be more effective, because they will be guided by data provided by an SRM. In general, teams that use supplier management software can achieve a 35% reduction in their total expenditure.

Improving the quality of the process

In the absence of an SRM, a number of problems can arise. Supplier data, including communication, is not available centrally for each supplier. In addition, unstructured processes mean that there is no strategic selection of suppliers. As a result, planning cycles are short-term and supplier monitoring is often completely lacking. All of these factors can lead to high administrative costs for product and supplier documentation, and slow down the purchasing process. Similarly, the lack of systematic evaluations means that it is hardly possible to assess supplier data and performance. The end result is poor product quality, wasted time and high process costs. All this can be remedied with management tools.

They provide a 360-degree view of suppliers, ensuring that relationships are optimised over the long term. This leads to lower cost prices and reduced process costs. At the same time, all operations, evaluations and improvement measures can be documented, which improves process quality.

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Building trust

As mentioned above, supplier relationship management software gives you more control over the activities of your suppliers. Such software needs to strike a fine balance between control and trust between buyers and suppliers. SRM also offers greater opportunities for communication, collaboration and information exchange. They increase the degree of transparency between buyers and suppliers and ensure a more open, trusting and honest relationship in commercial dealings. Control and trust are the consequences of better data management. The more you can see and manage, the more comfortable you and your team will feel. So break through the limitations imposed by your old, now obsolete, solutions. With improved supplier tracking, you can simplify all your exchanges and get a better return.

Most SRM solutions offer tools that will enable you to :

  • collect supplier data easily ;
  • make information and documentation easily accessible;
  • collaborate easily
  • easily integrate existing business solutions.

Transparency is needed to monitor supplier risk, compliance, performance, contract management and spend. Using SRM software, you can see supplier evaluations, data, scores, communication and documentation in one place. With optimum visibility through dashboards, it gives you exactly the insight you need to feel like you’re on the ground with your suppliers.

Task automation

Adopting supplier management software allows you to automate the purchasing and quality management processes, thanks to all the data collected. Electronic representation of the exchange of documents and data with suppliers often results in significant savings in administrative costs. Depending on the system design, suppliers can also actively make their own data available.

On average, companies can achieve estimated time savings of between 12 and 20% FTE. Whether it’s a strategic buyer, a manager or a responsible supplier, such results are possible when SRM technology is applied. Indeed, managing supplier relationships can involve a fair share of work. Process assistance (such as task automation, reminders and predefined templates) saves time and resources when the volume of work is high. It reduces time-consuming and potentially boring tasks for procurement staff. What’s more, it also makes it possible to manage supplier risk, which is no mean feat. The emphasis can then be placed on problem solving, analysis, prevention and development-oriented measures. These measures include seeking mutual savings, improving production efficiency and/or consolidating the supply chain.

Improving supplier experience

Suppliers don’t like receiving tedious Excel questionnaires and appendices during onboarding. If your SRM strategy involves scrutinising your customer-supplier relationships, it’s important to take into account the experience of both stakeholders. Supplier management software offers the opportunity to improve the supplier user experience, which is just as important as the buyer user experience. If a supplier sees a customer as someone who is easy to work with, the chances of them becoming more involved in the collaboration will increase dramatically. As a procurement organisation, your success often depends on a supplier’s willingness to collaborate, report and actively participate in your business. SRMs offer suppliers an ease of use that is directly linked to your business. They then help your business to remove the barriers that prevent your suppliers from getting involved.

 

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One thought on “Using a supplier management software in your company

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