Having a 360° view of suppliers has become a priority for all types of businesses, and for good reason. A 2013 Aberdeen report outlined the countless benefits afforded by enhanced visibility and control over all aspects of supplier relationships. The report contains compelling, oft-cited evidence that supply chain visibility plays a key role in the success of top-performing companies.
While comprehensive supplier management is, of course, more common in highly regulated industries, it’s both feasible and practical in almost any sector thanks to the sophisticated supply chain technology available today.
So, what exactly does it mean to have a 360° view of suppliers? Put simply, it means being able to see suppliers from all angles, rather than just focusing on price, which was once the main benchmark for the supplier selection process. Today’s comprehensive data systems allow for complete evaluations of overall value, which include a range of factors such as risk, compliance, quality, performance, and diversity in addition to cost, painting a much more accurate picture of suppliers.
Some of the key processes involved in creating a full 360° view are outlined below.
Determine What You Need From Suppliers
There’s no cut-and-dried ideal set of standards for suppliers. The defining metrics used to assess suppliers will ultimately depend on a company’s values, current needs, and vision for the future. Involve team members from procurement, compliance, quality, legal, and risk management areas to determine what your ideal supplier looks like before the RTF process begins.
And whatever a company may need from its suppliers, ensuring that they’re always viewed as valuable partners with useful industry knowledge will help bring about a mutually beneficial relationship.
Implement Comprehensive Onboarding
According to the above-mentioned Aberdeen report, top-tier companies are more likely to have streamlined onboarding processes. Ideally, these processes are automated and applicable for suppliers of all types and sizes.
This out-front approach helps to improve supplier relationships, as well as understanding of and adherence to compliance requirements, data quality, company image, and, most of all, efficiency. Well-thought-out onboarding is likely to reduce purchasing costs and risk, leading to top-line growth. And making use of best practices in supplier onboarding can also help ensure that suppliers are able to meet tech and information management requirements; confirming this during bidding will help prevent snafus and delays down the road.
Establish Centralized Supplier Information Management
Online, self-serve supplier portals allow suppliers to input their information — and even their product catalogs — in a standardized, centralized fashion that allows for easy analysis. Ideally, one team will oversee the management of supplier information, whether this is added to the duties of an existing team or a new team is created specifically to handle the task.
These self-service portals also allow suppliers to update information in real time, providing a clear picture of overall value and performance at every turn. Supplier dashboards can be used to help disseminate this information quickly and efficiently across the organization, providing a big-picture view of suppliers with simple benchmarking in place to assess delivery, cost, and performance.
Identify and Manage Supply Risk
While risk can never be completely eliminated, identifying potential risk early in the supplier selection process can help mitigate it. Since risk isn’t limited to just one area of a business, a risk team with members spread across the organization can help in spotting potential risk quicker, planning for it, and dealing with it more effectively when an incident does occur. This team should continuously develop and assess crisis management procedures based on current company needs; these procedures should include plans for preparing for, responding to, and recovering from incidents in order to best cope with risk.
Improve Performance Management
Complete, accurate data helps provide a clear view of supplier performance, which in turn helps companies find the best suppliers. For many organizations, this means implementing a single source of truth, from onboarding through auditing. This allows all relevant departments access to pertinent supplier information. Having access to comprehensive and accurate data can also help companies develop course correction criteria — ideally to be flagged by tracking software — so any issues that crop up can be dealt with swiftly.
Supplier performance management should involve providing feedback to suppliers so that they can become even better partners. The development of standardized supplier surveys and report cards can give an unbiased overview, with little effort and time required. Valuable feedback also provides an incentive for suppliers to nurture mutually beneficial buyer-supplier relationships.
The Takeaway
Accounting for these factors during the procurement process and beyond can help companies significantly reduce overall costs. Getting a 360° view of suppliers begins with a well-designed information management system to ensure the right suppliers are selected, followed by a comprehensive onboarding process, risk management analysis, and use of valuable data.
Image credit: Panchenko Vladimir/Shutterstock.com