Knowing your Supplier Network
It is a huge challenge for companies to rely on suppliers and get best quality products at a minimum cost. It is even bigger challenge to be ready with a quote itself (in the first place), as the times have changed and we work in an expeditious and more demanding society. Finding the right supplier who can be trusted has become like a game of treasure hunt. There are some companies who spend half of their time and money and undergo various processes, just to find the right supplier from whom they can get the best possible deal. Supplier Networks have thus become essential to compete in today’s business environment.
A Research conducted by the Aberdeen Group has found that companies using Supplier Networks are able to increase spend under management while reducing costs related to poor supplier performance.
A Supplier Network is a common, virtual platform where suppliers and buyers can collaborate and do business together from any part of the globe. It helps discover suitable opportunities for buyers, speed up procurement cycle that results in timely selection of goods, delivery and payment. Besides this, it reduces error, paper work and delays which could be caused if it was manual. Basically, Supplier Networks give buyers plenty of options from which they can select suppliers according to their preference and convenience, thus reducing cost and increasing profits.
Some of the benefits of Supplier Network that will help both suppliers and buyers to work closely and meet each other’s expectations are:
- Automated processes reducing manual efforts: Automation of data entry, data processing and data transfer between suppliers and buyers limits manual effort, thus reducing process time and smooth flow of information between both parties.
- Catalog Management: Supplier Network helps suppliers upload different catalogs for different sets of customers with the future pricing, item specifications and special offers, thus avoiding confusion.
- Simplified Sourcing Process: The whole sourcing process is simplified when both the parties can respond to sourcing events with interactive forum and viewing the event scores through supplier network.
- E- Invoicing and reduction in paper flows: E-invoicing is an advantage to Supplier Network. The procurement team cross checks the ordered items once it’s delivered and processes the invoice. After this, the invoice is transferred to the finance team who makes the payment. This way there is reduction in errors and delays due to paper flows.
- Contract Management: Supplier Network enables both parties to be aware of their commitments and expectations at all times by keeping a close watch on their contract terms. This reduces contract violations which results from miscommunication or from missing important clauses of the contract.
- Reduction in Purchasing Cycle Times: It helps build confidence amongst each party due to smooth flow of information, resulting into timely processing of orders, delivery, processing of invoice and payments. Thus, this enables them to reduce purchasing cycle time.
- Up-to-date supplier information: Information of suppliers is always updated with their latest information. Supplier Network integrates with supplier management software solution and enables on-boarding of potential suppliers.
- More visibility and better relationships: Since both parties need to work in collaboration, Supplier Network gives them clear visibility of order, invoice and payment status. This visibility helps both parties trust each other and build stronger relationship.
- Enhanced Supplier Performance Management: Supplier Network enables suppliers to monitor their performance reports and development reports through performance report card and development program card, thus helping them to improve on their pain areas.
So to conclude, Supplier Networks can be an asset to the companies which can improve supplier- buyer relationship thus reducing cost and increasing profits.