Supplier management ensures that an organization receives the best value from its suppliers. An organisation’s smooth running depends on these suppliers, so it’s important for both suppliers and organizations to work together properly.
A comprehensive supplier management policy ensures that the organization establishes a relationship with its suppliers, manages its requirements, and communicates clearly with them.
An organization’s supplier relationship management (SRM) strategy involves assessing the contribution and influence of suppliers on their success, identifying tactics to improve their performance, and developing the strategy to carry these tactics forward.
Supplier relationship management focuses primarily on post-contract management. A supplier lifecycle management (SLM) programme manages strategic and high-value suppliers throughout their entire lifecycle, from selection to end of contract. The most important part of the process is recognizing the value suppliers can provide in order to integrate those benefits into your procurement process.
Supplier information management (SIM) involves gathering, storing, updating, and analysing all supplier data in one place. The data is in the form of financial trading information, accreditations, and certifications that are necessary to trade with the buyer.
As a result, supplier relationships are strengthened, compliance is improved, and buyer workload is reduced.
Reduced risk – Using a supplier information management system can reduce the chance of fraud between employees and suppliers, such as invoice fraud, as well as reduce supply problems in a risk-free manner.
Reduced costs – Long-term cost savings can be achieved through supplier relationship management
Increased efficiency – As the relationship develops and communication improves, suppliers gain a deeper insight into their clients’ businesses. The result is a reduction in supply chain delays and an improvement in operational efficiency.
Supplier consolidation – Buyers can streamline their purchasing process with a consolidated supply chain, making budgeting easier, streamlining the purchasing process and. enjoy economies of scale.