Supplier management is a process that drives the best value between a company and the suppliers they work with. Within strategic procurement, Supplier Management allows companies to plan, manage and improve interactions with third-parties that provide them with goods or services. Supplier relationship management (see below) is a key factor in a company’s Supplier Management processes and should be beneficial to both parties when procuring goods and services.
Establishing strong relationships, and managing requirements on both sides with your suppliers is essential. It should never be one sided and should benefit both parties.
Every time a company onboards a new supplier there is an element of risk. Supplier Risk Management is a crucial factor for any business and should be carried out regularly for each supplier, especially when they’re first onboarded.
A standard company is highly dependent on their suppliers to deliver goods and services. Identifying risks early, such as poor performance or a reduction in their turnover can be an early indication that a supplier might struggle to meet their contractual obligations and therefore having a potential impact on your company’s deliverables.
If a company does identify any risks with one of their suppliers, it is always important to communicate closely with that supplier to discover further details and to manage the potential risk together, especially if they are critical to the operation of the company.
Supplier relationship management (SRM) is the process a company carries out to optimise their suppliers performance and develop strategic relationships with them. This is another crucial factor within the supplier management process and one that each company approaches differently. The overall goal however is usually the same, to build a stronger and closer working relationship with the supplier, in turn building confidence in results from both parties and also better communication which should result in improved customer service for the company and potentially more work in the long-term for the supplier.
Supplier Lifecycle Management (SLM) is an important strategic process used to manage suppliers throughout the entire relationship between a company and the supplier. It is important for a company to recognise the value and benefits a supplier can bring to their overall procurement processes from when they’re first onboarded all the way to the completion of a project or contract. A supplier should be regularly accessed throughout the entire relationship to identify risks or find further potentials they can bring to help grow the company.
Supplier information management (SIM) is the process that a company will carry out to update and analyse all supplier data under a single repository. This data usually includes a suppliers general company information, contact details, performance and risk analysis, documentation (such as accreditations and certifications) and any contracts they have with that supplier.
Having this information at a company’s fingertips can be highly beneficial and allows them to accurately evaluate them on historic and current data, enabling them to build a picture of their potential future capabilities.
Here at oboloo, we aim to help companies add more value to their supplier relationships. With tools such as cloud-based Supplier Management Software, we help businesses improve their processes as well as their esourcing, contract and savings management activities. Start your free trial with us today! oboloo enables organisations to be supplier smart.
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