Things You should Know about your Supplier Network!
In this article, you will learn things about the supplier network that is crucial to your procurement’s success.
Companies relying on suppliers to get the best quality products at a minimum cost is a challenge. It is an even more significant challenge to be ready with a quote itself (in the first place), as we work in a more demanding society. Finding the right supplier who can be trusted has become like a game of treasure hunt. Some companies spend half of their time and money and undergo various processes, 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 can 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, paperwork, and delays. 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.
Benefits of Supplier Network for Suppliers and Buyers
Automated processes reducing manual efforts
Automation of data entry, data processing, and data transfer between suppliers and buyers limits manual effort. This reduces processing time and smooth flow of information between both parties.
Supplier Network helps suppliers upload different catalogs for different sets of customers. Variables include future pricing, item specifications, special offers, etc., to avoid any confusion.
Simplified Sourcing Process
Sourcing process is simple when suppliers and buyers respond to sourcing events on an interactive forum. Viewing the event scores through a supplier network is helpful.
E-Invoicing and reduction in paper flows
E-invoicing is an advantage to Supplier Network. The procurement team cross-checks the items ordered after delivery to process the invoice. Then the invoice is sent to the finance team for payment. This way, there is a reduction in errors and delays due to paper flows.
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 missing essential clauses of the contract.
Reduction in Purchasing Cycle Times
It helps build confidence amongst each party due to the smooth flow of information, resulting in timely processing of orders, delivery, processing of invoice, and payments. Thus, this enables them to reduce the purchasing cycle time.
Up-to-date supplier information
Information of suppliers should be updated with the latest information. Supplier Network integrates with supplier management software solution and enables onboarding 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 a stronger relationship.
Enhanced Supplier Performance Management
Supplier Network enables suppliers to monitor their performance and development reports. Through the performance report and development card, suppliers improve on their pain areas.
In conclusion, Supplier Networks is an asset to companies to improve a supplier-buyer relationship, thus converting cost to profits.
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