The Why, What and How of Supplier Management – Part 5: Benefits of Supplier Management Technology
Till now we discussed the various external and internal reasons mandating supplier management technology. (Click here for part 1, part 2 & part 3 of the blog series). We also discussed how low user adoption rate impedes the success of the supplier management technology and measures that can be taken to overcome this challenge. (Click here for part 4)
Let’s now have a look at the benefits of implementing supplier management.
- Large organizations have offices spread across the country and thus it’s important that procurement execs have access to supplier information from any office. Modern supplier management tools have a centralized repository which facilitates quick and easy access to supplier details.
- Ability to track contract compliance to non-price parameters. For example, if the supplier has not submitted insurance certificates or quality certificates, then an alert is sent to the procurement execs.
- Time reduction for supplier profile maintenance.
- Well defined processes for qualifying and preparing suppliers for conducting transactions and participating in sourcing event.
- Supplier performance can be evaluated at a desired frequency with less time and effort. Data inputs can be captured and consolidated from many people and multiple systems.
- Ability to create development programs to support suppliers whose performance is not up to expectations.
- Detect potential supply risks. For instance, an alert would be sent out to the procurement execs if they are getting into a deal with a blacklisted supplier. Also, periodic supplier performance reviews help understand a supplier’s failure of performing well regarding a particular parameter, such as delivery time or quality, etc.
- Transparency and credibility of metrics and performance management processes.
In the next blog, last in the series, we will share some implementation best practices. Stay tuned.
For further reading, click on the download button below to access your whitepaper-The Why, What and How of Supplier Management.