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5 Ways a Supply Chain Management System Works Wonders!

5 Ways a Supply Chain Management
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Today, we will discuss five ways a Supply Chain Management System delivers to the supply chain effectiveness of some of the most iconic brands. With profit margins of the best companies shrinking, the top challenge for leaders across the globe is to find innovative ways to control cost.

The credibility of a company is affected easily if customer delivery hits a snag. It is the case even before a company realizes it. So, what is the solution?  Here, procurement needs to push aggressively for the inclusion of supply chain risk on the broader business agenda to protect a business from uncertainties.

Companies have gone global to meet the demands of the vast customer base by leveraging advantages offered by developing economies. In turn, the complexity involved with sourcing and managing a large supplier base has increased. To simplify this complex sourcing process and bring in more agility, procurement professionals need to leverage technology and automation. Here comes an effective supply chain management system.

5 Ways a Supply Chain Management System Works

Supplier Discovery

Firstly, supplier discovery refers to looking for a supplier meeting the company’s regulatory and project requirements. With outsourcing, the supply base has gone global. With this, the task of locating a perfect supplier match gets even more challenging. An effective supplier discovery process helps find a new supplier, which increases a company’s sourcing leverage and thus improves the supply chain efficiency.

Traditionally, companies referred to supplier registry or external networks to scout for suppliers. Using traditional methods for supplier-selection is time-consuming. An advanced sourcing tool and engages with the suppliers early through the supplier portal. It enables a procurement professional to create a centralized repository of all the supplier-related information. Such a strategy facilitates the company to take charge and track the best suppliers based on the project parameters.

Supplier Qualification

Secondly, we have seen several cases wherein unscrupulous supplier practices have marred a company’s reputation. Such incidents highlight the need to scan the suppliers by introducing a preliminary qualification round, which helps companies to judge the credibility of a supplier. Companies can have a questionnaire customized as per the project requirement. Shortlisted suppliers have to answer it after the discovery stage.

Based on the responses, the suppliers can be rated. Apart from the questionnaire, suppliers should also be asked to submit various mandatory certifications — for instance, audit requirements, company registration, etc. A qualification stage is required to weed out the wrong suppliers, thereby saving on the valuable resources of the company.

Supplier Selection

Thirdly, choosing the right supplier not only provides items/services at a competitive cost but also helps businesses to reduce the impact of economic uncertainties on the supply chain. Involve all stakeholders in the supplier selection process to ensure transparency and make the evaluation process more objective.

On qualifying a company’s requirements, there are other parameters and scenarios to evaluate the shortlisted suppliers further. They include geographic location, the stature of suppliers (minority women-owned enterprises, etc.), and non-price parameters like service delivered, employee strength, etc.

Supplier Onboarding

Fourthly, just like a company’s HR induction program, familiarize new suppliers about your company’s regulations and functioning. Supplier onboarding refers to the process wherein finalized suppliers are equipped with the necessary knowledge and behavior to become a part of the company’s supply chain. It ensures the suppliers are well aware of the company’s expectations.

With the advent of technology, this process of supplier onboarding is easy, less time-consuming, and more accountable. For instance, a supplier should submit various documents and mandatory certificates. You can track the submission of those documents and other information when they upload them to the supply chain management system.

Supplier Performance and Expectation Management

“It is an immutable law in business that words are words, explanations are explanations, promises are promises, but only performance is a reality.”

goes the quote by Harold s Geneen, late president of ITT Corporation. This quote very well summarizes the significance of performance management. A company should evaluate the performance of its suppliers at regular intervals.

Fifthly, Key Performance Indicators (KPIs) can be set depending on the project a supplier is set to deliver its service. Such KPIs include on-time delivery, quality, innovation, etc. In other words, a supplier management system factors in KPI scores to assess supplier performance. The comparison takes place against the benchmark set for each parameter.

Most importantly, if the score is not satisfactory, enroll a supplier for a development program to ensure they move towards the desired score. Through supplier performance and expectation, check via as supplier management system can help companies determine the worth of value generated. Further, depending on the production, businesses can route the alliance to make it more profitable for both the supplier and the company itself.


Finally, if you would like to harvest the above-discussed wonders, then it is time to consider the implementation of an effective supply chain management system. To help you decide better, click the download button below. It is an old whitepaper but still relevant in helping you decide better. In addition to that, you can always contact us for more information or visit our supplier management system offering.

Learn More: Vendor Management Guide

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Zycus is a leader in Cognititive Procurement. A leading SaaS platform used by many large enterprises across the globe for enabling efficiency and effectiveness of the procurement function.

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